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Episode 232 – Geely Finds Investor, Visteon Cuts Bonuses, Speed Limiters in Canada

September 21st, 2009 at 12:28pm

Runtime 5:23

Goldman Sachs will invest $250 million in Chinese automaker Geely, which could allow Geely to purchase Volvo from Ford. Auto supplier Visteon, has decided to cut executive bonuses by 85 percent. All that and more, plus Canada considers limiting the top speed of cars to 93 miles an hour.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. Geely could be getting the money it needs to buy Volvo. A judge orders Visteon to cut its bonuses to management. And Canada considers limiting the top speed of cars to 93 miles an hour.

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

This is Autoline Daily for Monday, September 21, 2009. And now, the news.

Goldman Sachs has a private equity group that is investing $250 million in Chinese automaker Geely. The Wall Street Journal reports that this could free up capital so that Geely’s parent company could purchase Volvo from Ford. Even though $250 million doesn’t sound like much money in automotive terms, the Journal says this is much larger than most private equity deals in China.

Unless Cadillac can get back in the leasing business, it’s going to have a hard time getting back on its feet. The Wall Street Journal reports that Cadillac is losing more sales and market share than other luxury brands (subscription required). Last month only 6 percent of Cadillac customers were able to lease a car, while most luxury brands average 32 percent. Even though GM started to get back into leasing through GMAC and U.S. Bancorp, Cadillac still isn’t able to offer leases as competitive as other luxury brands.

Auto supplier Visteon, has decided to cut executive bonuses by 85 percent. According to the Detroit Free Press, the company, which is bankruptcy, will pay $11.4 million in bonuses to 95 executives through a plan that is based on meeting financial goals and other milestones. Originally, Visteon planned on paying $80 million in bonuses to over 2,400 employees.

Audi will hit its sales target in China two years ahead of schedule. According to Reuters, the company had planned to reach 200,000 in sales by 2015, now Audi expects to get to that figure by 2013. This year, the company expects to sell around 136,000 vehicles in China.

Coming up after the break, a look at a wild and crazy-looking mini-minvan from Suzuki, and this week’s guest on Autoline After Hours.

The Japanese love Kei cars. No, not the front-wheel-drive models that saved Chrysler in the 1980s, but the wacky-looking micro vehicles sold with motorcycle engines. With an eye on design, Suzuki has restyled its Palette mini-minivan. The Palette SW offers a stylish new front end that’s more aggressive than the standard version and a new two-mode CVT. If you thought the original Scion xB was square you haven’t seen this thing yet! Talk about boxy! I think my Frigidaire freezer at home has more curves!

An interesting bit of news coming out of Canada. Apparently a few years ago the government of Ontario passed a law that lets the police confiscate your vehicle if you exceed the speed limit by more than 50 kilometers an hour, or 31 miles an hour. This was done to crack down on street racing. Now, according to Autoblog, an MP has introduced a bill to limit the top speed of vehicles to 150 kilometers an hour – that’s 93 miles an hour – so it’s impossible to drive fast enough to lose your car. The proposed legislation would make it illegal to SELL, IMPORT, BUILD or even LOAN a vehicle to someone if it’s not equipped with a speed limiter. So far the bill hasn’t even made it out of committee.

Don’t forget to tune in to Autoline After Hours this Thursday. Our guest will be Tim Leuliette, the chairman of Dura Automotive, but Tim has a slew of experience in running a variety of different supplier companies, and even did a stint with Roger Penske. He’s one of the most product-savvy executives in the supplier community and I think you’re really going to enjoy this show. That’s this Thursday night, live at 7 p.m. Eastern, or 2300 hours GMT.

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

Thanks to our Partners for embedding Autoline Daily on their websites: Autoblog, The Auto Channel, vLane, WardsAuto.com and WWJ Newsradio 950

47 Comments to “Episode 232 – Geely Finds Investor, Visteon Cuts Bonuses, Speed Limiters in Canada”

  1. Tony Gray Says:

    Canada’s version of the 85 MPH speedometer. Good luck with that.

  2. Nick Stevens Says:

    John: It is the “Palle’tte”, not the… “Pa’llette” as you said it. I think you confused the “Pa’llet”, which is a box to be transported, to this name “Palle’tte” as in a painter’s pallette.

  3. Nick Stevens Says:

    John:

    Great bonus show this morning with that clueless GM VP that unfortunately shares my last name..

    If you could invite his equivalent from Honda or Toyota or BMW or even Hyundai., and keep your panel,esp. Csaba Czere, to grill them, ot would be very revealing to the viewers to see how much better the competition is compared to this sorry relic of “Old GM”…

  4. Dan Clemons Says:

    The way I see it, Chrysler is 13 years behind the competition, GM is 9 years behind the competition, and Ford is 2 years behind the competiton. If the Chevy Malibu is the best GM can do, GM is automotive history. GM lost me when they turned a bathtub upside down and called it a car.

  5. pedro Fernandez Says:

    John, no matter how rosy a picture your guests try to paint, every day the auto news brings closer the rise of the Chinese auto industry and then demise of the American one. No wonder experts keep predicting good things for Ford, in a couple of years they won’t have any US based competition to worry about.

  6. Jim Sachetti Says:

    Dan, I agree with you 100%, and I am sickened at the prospect that I and my fellow successful, hard working US Taxpayers will be paying the bills for these bankrupt, incompetent, arrogant clowns at GM and CHrysler.

  7. Salvador G. Says:

    OH! OH.. those poor, poor Visteon executives only 11 million dollars, I almost cry. :P

    Let me get this straight… IF I were to drive my car at no more than 30 miles above the speed limit in Canada, the police won’t take my car???
    -OK then.

    Kei cars really; how “aggressive” can a Kei car look, 0 to 60 in what -WHEN.
    - I actually saw a Kei mini-minivan here in Jersey once, not what you would call “God I want one” I didn’t think it was a real.

  8. Jim Sachetti Says:

    “# pedro Fernandez Says:
    September 21st, 2009 at 1:12 pm

    John, no matter how rosy a picture your guests try to paint, every day the auto news brings closer the rise of the Chinese auto industry and then demise of the American one.”

    The Chinese (and the INDIANS! In fact, the indians consuume far fewer cars than the chinese, so they have many more to EXPORT) may (or may not!!!) be a future problem, but the domestics have already their hands full with the existing problems, that is japan AND Europe (both luxury and VW) and now the very successful KOREANS.

    In fact, given the always discounted prices of the domestics, they have far more to fear from the Koreans than even from the Japanese!

    The Koreans today are what the Japanese were 20 or even 15 years ago.

    “No wonder experts keep predicting good things for Ford, in a couple of years they won’t have any US based competition to worry about.”

    This has ALREADY happened! Many people moved to ford and not to gm and chrysler because of Fear they will not survive, others because they hate to waste their tax dollars on the losers, on PRINCIPLE say they will not buy Gm or chrysler products ever again.

  9. Alex Kovnat Says:

    What bothers me about that Canadian proposal to limit cars to no more than 93 MPH is not so much the technical facts, but the mindset behind the whole idea.

  10. Nick Stevens Says:

    I’m sure the police that waste their days idling and polluting the environment to fill their quota of tickets, will be sorry to miss this opportunity to write the plumpest, most expensive tickets for those doing more than 90 MPH/150 kph.

    This just proves that most cars today, especially econoboxes and non-enthusiast cars like Buicks, are GROSSLY OVERPOWERED, a huge waste, and a temptation to all irresponsible teens to drive at thre digit speeds.

    Only 25-30 years ago, in the frugal, high-MPG 80s, few cars could exceed 100 mph.

    The fact that luxury cars today compete not on luxury but on greater and greater hp, which has already reached RIDICULOUS levels, with 400 HP being the LOWER LIMITR for top luxury cars,

    proves my long-held belief that gas is DIRT CHEAP in the US at $2.50, and even at $5. If you want fuel efficiency and responsibility, slap a huge fuel tax on gas.

  11. Chuck Grenci Says:

    IMO you don’t pay bonuses when the ‘end product’ fails. Bonuses should be paid from profit not operating capital (and in this case not even that).

  12. pedro Fernandez Says:

    I just saw a new comedy act on the internet, he’s “Tom, fantasy man” he says such funny lines as: “Buick competes with Lexus” and “Our new produsts are as good as any competitor” LMAO. He should go to the Leno or Letterman show and make a killing.

  13. Jim Sachetti Says:

    Pedro,

    There is nothing surreal about that phrase, “Buick competes with lexus”.

    I was looking at a consumer reports mag yesterday, from back 2002 and 2003, and they had a comparison test, the Toyota Avalon and the Buick Park Avenue. The Avalon was specifically designed to take on BUICK, all the way to the 6-person seating arrangement with the god-awful bench seats up front, but amazingly the Avalon was far bigger in the back seat than the much heavier and longer buick, and had a far better interior, esp. what the driver sees in front of him or her. The buick and the Town car and the Crown Vic also compared were far inferior, esp in their interiors.

    Lexus also is frequently compared to Buick because of the poor ‘feel’ their cars, even the LS flagship, have, that reminds them of old Buicks. The LS 400-430 and 460 were frequently and dissmisively called the “Buick LS400-430-460″ by Auto enthusiasts.

  14. Pedro Fernandez Says:

    Jim, I believe flim flam Tom was referring to Buick quality and driving dynamics, if that’s the case, then anyone who buys the more expensive Lexus is an idiot, when they could have owned a similar quality Buick for a lot less $. Same thing with him hyping the upcoming Cruze, he should have said; “after all these years, GM may finally have a competitor for Civic, Mazda 3 and Corolla.

  15. Andy S Says:

    I wonder what will happen to an American when visiting Canada. Will the “not speed limited” American vehicle be decalred illegal even while driving at or below the legal speed limit of 100 kph? How does the WTO view this?

  16. Pedro Fernandez Says:

    I see nothing wrong with limiting a car’s speed. It would prevent all those horrific crashes we see in police videos, there’s no need for a car to exceed 90mph

  17. Jim Sachetti Says:

    Pedro:

    Lexus driving dynamics for the Avalon are just as lousy as the Buick’s, remember Toyota purposely designed the Avalon as a Buick fighter, to get that market share from GM as well as that of the corolla and camry segments. AND you are quite WRONG, the Buick park avenue was far MORE expensive than the TOyota Avalon back then in the 90s and even today (3rd gen avalon vs lucerne).

    Lexus driving dynamics have been poor for almost 20 years too. If they were as good as the Merc S class or, esp. the BMW 7′s, then those who bought lexuses would be idiots indeed,

    But the ones who buy an LS400-430-460 do it for the better RELIABILITY (even better than Merc and BMW), the excellent interior materials and fit and finish, and good resale. They are anything but idiots. Those that buy buicks, however…

  18. Jim Sachetti Says:

    “# Andy S Says:
    September 21st, 2009 at 3:09 pm

    I wonder what will happen to an American when visiting Canada. Will the “not speed limited” American vehicle be decalred illegal even while driving at or below the legal speed limit of 100 kph? How does the WTO view this?”

    I am pretty sure that this law can’t apply to tourists vehicles. If canadians know what is in their best interest.

  19. Pedro Fernandez Says:

    Jim, I was comparing Buick with Lexus, not Avalon. that’s what today’s guest was referring to, Lexus vs Buick. I cannot believe anyone looking to buy a Lexus who would actually consider a Buick, they’re not in the same class. ps. I have driven a Lexus LS and while it is a posh ride, that’s what it was designed to be. If you want road-holding handling, look elsewhere.

  20. Jim Sachetti Says:

    “# Pedro Fernandez Says:
    September 21st, 2009 at 3:34 pm

    Jim, I was comparing Buick with Lexus, not Avalon. that’s what today’s guest was referring to, Lexus vs Buick.”

    Given that the lexus ES350 is just a CAMRY, I do not see the difference.

    ” I cannot believe anyone looking to buy a Lexus who would actually consider a Buick, they’re not in the same class.”

    have you seen Buick prices lately? Even back in the 90s, a park avenue was $35,000! ((IMO the POS was not worth $10k!) The top of the line LExus started at $35,000 as well! (in 1990), and the Camry-clone nexuses went for much, much less ($25,000 or less then)

    ” ps. I have driven a Lexus LS and while it is a posh ride, that’s what it was designed to be. If you want road-holding handling, look elsewhere.”

    ANY consumer that pays $60,000 or much more for a luxury car, should have EVERYTHING, and the [price is high enough to enable the automaker to offer everything. It is not acceptable that luxury cars ride like barges. Mercedeses, which Lexus tried to compete with, do not ride like barges. BUICKS DO. hence the comparison was anything but funny,

    and this is one more reason that nobody calls the LExus LS400-430-460 the “Mercedes 400-430-460″, but “the buick 400-430-460″ instead.

    I have seen the latest brochure for the LS460. Despite the fact that it has ample power now (380 HP!), they focus on how excellent their leather and other creature comforts are. That is to be expected from a top of th eline luxury car, BUT superior handling and dynamics is ALSO expected. There is NO reason why the car should not have both, and the new BMW 7 series does., for example.

  21. Kit Gerhart Says:

    Pedro said:
    “No wonder experts keep predicting good things for Ford, in a couple of years they won’t have any US based competition to worry about.”

    You could be right about GM and Chrysler going away in a couple years, but they, espcially GM, would not deserve to on the basis of today’s products.

    GM has better products than Ford in a number of market segments. Malibu is better than Fusion. The new Equinox is MUCH better than Escape. Ford doesn’t even have any competition for Traverse et. al. Then, there is the “luxury” segment. Cadellac CTS is a much better entry in it’s segment than Lincoln’s front-drive cars. I’m just hoping Ford will get the Fiesta and next generation Focus to North America without screwing them up.

  22. Kit Gerhart Says:

    The people who buy Lexus LS460′s buy them for the quietness, soft ride, gadgets, and reliablity. They are not looking for a 5000 pound four door sports car. They are looking for LUXURY. LS buyers are a different group of people from 7-series buyers who ARE more likely to be looking for sporty handling in a big, fast car.

  23. Pedro Fernandez Says:

    Kit: the Equinox is a very nice vehicle indeed, had the opportunity to drive one since a girl cousin of mine was looking for a small SUV. I insisted that we test the Equinox, and even though she liked it, she went for a RAV4 due to bad experiences she had with a couple of GM products many years ago. This is what hurts GM the most,they may have got rid of their legacy costs, but not their legacy due to previous bad experiences owners have had with their vehicles. How can you fight that? I don’t think you can. Like her case I’m sure this happes over and over again when buyers have to decide where to put their hard earned money towards a new vehicle purchase.

  24. Kit Gerhart Says:

    You’re right, Pedro. GM has a hard time getting past customers’ bad experiences from years ago. Meanwhile, people have forgotten that, not all that long ago, Toyotas rusted much worse than American nameplate cars. I don’t know what GM can do, except build good cars and hope people will notice.

  25. Tom Says:

    John. The PALETTE SW may make a low cost wheelchair van.
    Re: Speeding in Ontario. A family was stopped for going 50kms over the limit. Their car was seized on the spot. They were from Michigan.

  26. Pedro Fernandez Says:

    Kit: that’s so true, you still see beat-up, rusty Toyotas, specially pickups and Corollas running around like wounded beasts, but running nonetheless, that’s how they build the reputation that they have, even though the new models are not going to be so durable, I think.

  27. Andy Santols Says:

    In Canada MP is Member of Parliament, not Minister of Parliement.

    The proposed speed limier bill is just a “private members” bill, which in the Canadian system is basically just a bit of grandstanding by one politician for his constituents, and has nothing to do with actual government policy. It will go nowhere, and doesn’t warrant any concern.

  28. Dave Says:

    I dont know about the Toyotas rust faster than an “american” or mexican made GM or Ford. I had a Thunderbird that rusted fast and we can all remember the S-10 and small GMC trucks that rusted while in the dealer’s lots. Every car company has a model here or there that has rust problems, but the Hondas and Toyotas keep running.

  29. Dave Says:

    Also I have a 7 year old Toyota Matrix XRS that looks as good as the day I drive it home new, and thats with N/E Ohio weather!!

  30. Pedro Fernandez Says:

    Here, in So. Fla. rust is not an issue at all, however heat is a big problem taking its toll on cooling systems and interiors and yes you do see a lot of real old Toyotas, even when they stop running, they ship them to Haiti where voodoo mechanics get them going again. My Corolla is at 285k miles with original engine and tranny.

  31. Kit Gerhart Says:

    A friend got an ’86 Camry at about the same time I got a Celebrity wagon. Both cars were reasonably reliable, even my Chevy, but the body of the Toyota was much rustier when the cars were 10 years old. This was in central Indiana, a very car-unfriendly place because of the road salt.

  32. Jim Sachetti Says:

    “Kit Gerhart Says:
    September 21st, 2009 at 4:08 pm

    The people who buy Lexus LS460’s buy them for the quietness, soft ride, gadgets, and reliablity. They are not looking for a 5000 pound four door sports car.”

    that is a strawman.

    1. Those who buy a Mercedes S class are NOT looking for a sports car either. BUT, as I said, the mercedes drives with the control and haqndling a true luxury car should have. Not as good as the 7 series, but quite good.

    2. Even those who buy the BMW 7 are also not looking to buy a sports car, they would have bought an M3, M5, or a Z4 if they were out for that type of vehicle. NO, as i said, they want Everything and they SHOULD get everything, when the new 7 costs a cool $100,000. AND BMW Does DELIVER! Have you seen the interior of the new 7? Far, far more luxurious than luxury cars 10 and 20 years ago, hand-stithed leather everywhere, little or no plastics, etc.

  33. Jim Sachetti Says:

    PS Kit, if Lexus drivers do not care about performance, why did Lexus bother to offer a BASE engine on the LS460 that makes … 380++HP???? (the hybrid LS600h makes well over 400 HP!!)

    Not more than 10 years ago, neither the 12-cylinder top of the line 750iL, and not even the Corvette, made 400 hp! And most Porsches and Ferraris did NOT make 400 HP either!

  34. Jim Sachetti Says:

    Regarding Pedro’s claim that Buick and Lexus are not in the same class:

    I disagree.

    Here is why:

    Toyota (Camry, Corolla, yaris, Avalon etc) compares with CHEVY, not with Buick. The Toyota division as well as Chevy make millions of cars, and there is little price difference between them. THEY belong in the same class..

    Top of the line Lexus models (LS 460 and maybe a few pricy SUVs) compare with CADILLAC. in price and performance and luxury.

    MId-and low-priced ($30k or so) Lexus models are EXACTLY OPPOSITE BUICK, not Chevy and not Caddilac, in both price and design and handling etc.

  35. John Says:

    The broken link above should have been this:

    http://media.grand-am.com/news/index.cfm?cid=22981

  36. Wayne Says:

    The 50Km over the speed limit law in Ontario (which I personally don’t agree with but that is another arguement!) should and does apply to tourists from south of the border as well as residents. If anyone thinks it shouldn’t apply to tourists then they open up the arguement that all of a country’s laws shouldn’t apply to visitors. Isn’t that a lot like diplomatic immunity (which is total B.S.!!)??
    As far as mandating speed limiters on vehicles in Ontario, I don’t think that will fly with the voting public but we will have to see?? A note to Pedro, do you really think limiting speed will prevent accidents? They may be less severe but the number will likely not change. Look at driving on the Autobahn in Germany. Sure they have some horrendous crashes, but the frequency of accidents and the fatalities per capita are lower than in North America. The reason for this? Unlike their North American bretheren, as a whole they actually know how to drive!!

  37. Wayne Says:

    I forgot to mention that Americans already drive vehicles into Canada that are “technically” illegal and the reverse holds true as well. Emission and safety standards are different in both countries but vehicles are allowed to be legally driven across the border in both directions. I think the same will hold true if the speed limiter law is passed. Let’s just not go there!!!!!

  38. Mouhamad A. Naboulsi Says:

    I am tired of the stupid negativity displayed here and else where about the fate of U.S. automotive companies. Unless you Morons work for a Japanese, Korean or European company, perhaps you should do your homework before twisting the knife in our own backs planted by idiotic committees on Capital hills.

    I may have mentioned before, but here it is again. An American badged car and a Japanese badged car roll off the same assembly line in the United States with Identical powertrain and seating suppliers and… and… and…. The U.S. badged car gets blasted by an elitist media and get rejected by the public as a result and shows higher warranty numbers for the same parts. On the other hand, the Japanese badge gets wonderful reviews and their owners can’t say anything bad about them and the warranty numbers are much less then the American badged version.

    In conclusion, we in America have a low image of our selves and our abilities and willingness to be as good as or better then the next country.

    This self punishing attitude did not transfer to the Banks who really screwed the American public And caused us all the pain we are in now. How come no judge is complaining about them paying hundreds of millions in bonuses to a bunch of thieves that caused this problem in the first place. Why? Because they are not automotive. They can’t be demeaned and attacked because no one has an alternative to American Banking.

    Instead of wishing the demise of any American manufacturing company, we should wish the demise and the end of Wall Street so money for investment stays close to home where it will do the most good.

    As for Toyota benchmarking Buick, did any one stop to ask why? Does anyone bench mark them selves to a lower target?

    Additionally, when a company benchmarks a car, the aim is to surpass it, so the next generation will be able to take share from the competition. So it’s not a fair or smart to compare a current model vs. the next generation from the competition.

    GM had its problem and so did Ford and Chrysler, but GM has excellent product line up, Chrysler suffered from Mercedes take over and lost cash and IP and they still have Quality image, but they are filling a niche that no one else want to fill.

    Stop shooting us in the foot, we need it to kick some serious ass and unless you shut your mouths and start thinking balanced and fair (And do not project your genius about things you know nothing about), else you may find that foot as yours and it’s in your mouth once things go back to recovery status.

  39. Jim Sachetti Says:

    John Mc Elroy:

    Please remove, for good, this uninformed, vulgar and offensive person’s posting privileges on this forum, if he or she cannot behave like a civilized human being without calling all of us names. The outburst below is UTTERLY UNACCEPTABLE.

    “Mouhamad A. Naboulsi Says:
    September 22nd, 2009 at 1:26 am

    I am tired of the stupid negativity displayed here and else where about the fate of U.S. automotive companies. Unless you Morons”

  40. Jim Sachetti Says:

    PS Kit,

    You may be correct about the LS460 specifically, but lexus makes other cars which do strive to compete in sporty segments, esp. the IS series, a clear BMW 3 series fighter, and even the GS series, a 5 series fighter.

  41. G.A.Branigan Says:

    WOW,is that boor thor reincarnated? PS:I drive american,08 Jeep JK,09 Ford Focus SEL.

  42. Jim Sachetti Says:

    This worthless vulgarian is the exact opposite of poor old Thor, who, as far as I remember, never called this group “you morons”, and, far more importantly, never said one good word about the domestics.

  43. Jonathan Says:

    Putting the name calling aside, Mouhamad has some valid points. This country has an obsession with the Jap brands, and we are shooting our self in the foot about cheering the closure of the detroit three. The US taxpayer have payed to defend Japan for decades and they do not import our products. We should give them the same courtesy that they give us.

  44. G.A.Branigan Says:

    Your right….I believed he called us “idiots”,for buying new,and buying american.

  45. Chuck Says:

    You’re right, Pedro. GM has a hard time getting past customers’ bad experiences from years ago. Meanwhile, people have forgotten that, not all that long ago, Toyotas rusted much worse than American nameplate cars. I don’t know what GM can do, except build good cars and hope people will notice.

    How about if you don’t like and have driven it less than 4000 miles and a certain anmount of time (don’t remember off the top of my head), you bring it back?

    Will that help?

    How about a dealer isn’t GM, it’s a franchise? I didn’t know that many years ago when I got taken by an unscrupulous dealer. You can’t get anywhere with a dealer, call the 800 number in your owners manual, that’s GM.

    Does that help?

  46. Pedro Fernandez Says:

    One thing we all can agree on: There’s a lot more national pride for domestic brands in Europe than in the US. The Brits defend their unreliable rust buckets to the end and so do the Germans with their brands. Here, perhaps because of all the immigration, we’ll give even third world country brands a chance.

  47. Kit Gerhart Says:

    Sadly, there are no British car companies any more. The last remaining “mainstream> British car company was Rover. The last I knew, European Ford was the best selling car brand in Britain, but that may have changed.

    You are right about national pride affecting car sales, especially in Italy and France. From my recent experience with rental cars, recent Fiats, Renaults, Citroens, and Peugeots are decent cars, but not necessarily best-in-class.