November 16th, 2009 at 12:00pm
General Motors lost $1.2 billion in the third quarter. Even with all the restructuring in the auto industry, a report says that there is still way too much overcapacity. Porsche is suing a shoe company over naming its sandal the Cayman. All that and more, plus a look at the all-new Kia Sorento.
Transcript and Story Links after the jump . . .
Here are today’s top headlines. GM posts its first earnings since emerging from bankruptcy. There is still way to much overcapacity in the global auto industry. And we also have a story where I get to use some of my vacation pictures.
Up next, we’ll be back with the news behind the headlines.
This is Autoline Daily for Monday, November 16, 2009. And now, the news.
General Motors lost $1.2 billion in the third quarter, what it calls a managerial net loss. Managerial accounting refers to financial reporting that management uses, and differs from GAAP guidelines, which is used to report to shareholders. On an earnings-before-income-taxes basis, it lost $261 million. GM’s North American operations lost $661 million, and its international operations made a profit of $238 million. But GM said it would also start repaying U.S. and Canadian loans in the fourth quarter, and would make quarterly payments of $1.2 billion until the loans are paid off in 2011. It will repay the German government loans to Opel by the end of this month. GM also said that it’s global market share was up, compared to the second quarter of 2009.
Saab dealers in the U.S. are running low on inventory. According to Bloomberg, the car maker has cut production and is retooling a factory to produce the new 9-5 next year. GM’s sale of Saab to Koenigsegg is holding back production until that deal goes through. And last week it was announced that 81 out of 218 Saab dealers in the U.S. will close. Saab sales in the U.S. have dropped over 60 percent this year.
Even with all the restructuring in the auto industry, a report from CSM Worldwide says that there is still way too much overcapacity (subscription required). According to the Wall Street Journal, the industry is capable of building nearly 86 million vehicles a year, about 30 million more than will be sold this year. And by 2015 the industry will only get to 85 percent of capacity utilization. It says that more brands need to die off and that acquisition of brands, like Volvo and Saab by Chinese automakers, will not help reduce overcapacity.
The Detroit Free Press reports that Ford resolved the labor troubles at its Kansas City, Missouri, plant. Workers were voting to strike over workload issues. The facility builds the F-150 pickup and the Escape/Mariner/Tribute SUVs.
Ford also announced the development of an all-new, purpose-built police interceptor to replace the ancient Crown Victoria when production ends in 2011. The company says it will exceed the old model in durability, safety and performance, but doesn’t say what it will be built on.
The European Union is working on a research project to allow platoons of cars to automatically link together. According to the BBC, up to eight vehicles would autonomously follow a lead “platoon” vehicle that’s driven by a professional driver. Thanks to various sensors, the cars in platoon would automatically follow each other behind the lead car so drivers can read, watch TV or do whatever they want. The idea is to make the platoons active so vehicles can exit and join freely. This approach eliminates the need to embed expensive sensors in the road because each vehicle would be outfitted with its own electronics.
I just love this next story because I get to use some pictures I took on my vacation. Autoblog reports that Porsche is suing Crocks Inc., the company that makes those blobby looking foam shoes, because it calls its popular sandal “Cayman,” a name Porsche trademarked. A Cayman is a type of crocodile, also known as a Yacare. But who’s going to confuse a sports car with a pair of shoes? Sounds to me like Porsche’s lawyers have too much free time on their hands.
Coming up next, a look at the all-new Kia Sorento, we’ll be back right after this.
The Crossover segment continues to grow as manufacturers either add new product, or in this case, upgrade an existing one. And that’s just Kia has done with the 2011 Sorento CUV.
This all-new vehicle is also the first product to start coming off the line of the equally all-new Kia manufacturing facility in West Point, Georgia which has the capacity to build around 300,000 Sorentos a year.
One of the bigger changes to the vehicle is visual…it’s over four inches longer and an inch or so wider than its predecessor. That gave engineers the room to add a third seat, allowing Sorento an advantage over some of its more popular competition. The extra five more cubic feet of space didn’t hurt either…All of which is key since Kia is now spotlighting the family with this latest version of its CUV.
And keeping with that target, up front, the upgraded interior comes with a standard technology package that features everything in it from satellite radio, CD and an MP3 system along with Bluetooth connectivity that’s hands-free. Push button-start and a host of other options are available to add-on.
The unibody construction sports either front wheel or all wheel drive.
Under the hood there are two engines available — the 2.4-liter four-cylinder with 172 horsepower and the 3.5-liter V-6 with 273 horsepower. With a six-speed automatic transmission that gives the four-cylinder 21 city (11.2 l/100 km) 28 highway (8.4 l/100 km) while the six is just under that at 20 mpgs in town and the same 28 on the road.
The 2011 Sorento which goes on sale in January starting around $20,000 is still looking up at segment leaders like the Ford Escape and Honda’s CR-V. We’ll see if Kia’s recent success in the North America market can bring this crossover closer to the competition in sales.
And that’s it for today’s top news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.