January 20th, 2010 at 12:00pm
Chinese and Japanese auto companies are taking a very proactive approach to securing long-term supplies of lithium. The California Air Resources Board is threatening to pull out of the CAFE compromise. The Detroit Auto Show shows a significant increase in attendance. All that and more, plus John answers your questions in the “You Said It!” segment.
Transcript and Story Links after the jump . . .
Here are today’s top headlines. Asian automakers are locking up global supplies of lithium. California threatens to drop out of the CAFE compromise. And the Detroit Auto Show shows a significant increase in attendance.
Up next, we’ll be back with the news behind the headlines.
This is Autoline Daily for Wednesday, January 20, 2010. And now, the news.
Fascinating story in the Wall Street Journal. Toyota has just secured long-term supply contracts for lithium in Argentina (subscription required). Demand for the material to make light-weight batteries is expected to skyrocket in the coming decade, and there aren’t that many global suppliers, so availability could be tight in the future. The Journal reports that Chinese and Japanese companies are taking a very proactive approach to securing long-term supplies of lithium. And you have to wonder where that will leave the U.S. and Europe.
In a puzzling development, the Detroit Free Press reports that the California Air Resources Board is threatening to pull out of a deal with the federal government on the fuel economy standard to reach an average of 35.5 MPGs by 2015. That’s 6.6 L/100 km. California says it will pull out of the deal unless the federal government lowers the CO2 credits it gives for zero-emission vehicles, and unless it front-loads the standards, meaning automakers have a steeper ramp-up right now, rather than in 2015. I have to editorialize here to say this is just California craziness, because what it is demanding will have very little impact on the environment, but an extremely costly impact on the auto industry.
Ford’s latest buyout offer to UAW members isn’t attracting much interest. According to the Detroit Free Press, union leaders say workers aren’t opting for the buyout because of the company’s financial improvements and finding another job would be difficult in this economy. The offer expires on Friday. Last year a similar buyout was accepted by only 1,000 members, and workers say the company has offered so many buyouts that they’ve pretty much weeded out the ones who want to leave. This poses a problem for Ford because the only way it can lower labor costs is through new hires and if no one’s leaving they’re stuck with paying current employees higher wages.
This year’s Detroit Auto Show is a step up from last year’s, and the public must have taken notice. Through the first three days of the show this year, attendance is over 240,000 compared to about 205,000 last year. Good news for the city and organizers for one of Detroit’s premiere events.
Just like Commodore Matthew Perry in 1854, the U.S. has forced Japan to open to the West, except this time it didn’t take a fleet of “black ships” landing on their doorstep. The Detroit News reports that in the wake of heavy pressure, the Japanese government has finally changed its cash-for-clunkers program to include Detroit Automakers. This is an important political win for the Big Three, which have been fighting for fairer trade in global markets. But it’s just a token gesture. GM, Ford and Chrysler sold fewer than 9,000 cars in Japan last year, and this isn’t going turn that around.
Autoblog reports that Audi is expected to include Google Earth in its next-generation MMI system. With an in-car internet connection drivers will be able to pull up high-quality satellite maps right on their navigation screens. The idea is to make the setup as comprehensive and easy to use as your home computer. Just like Google Earth on a PC, you can zoom in and out, and even pull up Wikipedia pages on different cities and towns. Audi’s new MMI system should premiere on its redesigned 2011 A8.
Coming up next, it’s time for You Said It!
And now it’s time for some of your comments.
Omar03dammam saw our report on Honda being mad at Hyundai’s fuel economy ads, saying it shouldn’t be rated No. 1 because it’s not a full-line manufacturer. I pointed out that Honda isn’t a full-line manufacturer, either, and that only the Detroit Three meet that definition. So omar03dammam wrote in to say, “Toyota and Nissan are full-line manufacturers. Just want an excuse for American automakers, McElroy??!!!”
Well, Omar, Toyota and Nissan are not full-line manufacturers. Close, but not quite. They don’t make or sell full-size vans. Collectively, the Detroit Three sold 150,000 of them last year, and in a good year they sell over a quarter of a million. Those big vans help drag down their fuel economy average, which is a key reason why GM, Ford and Chrysler always come out at the bottom of the CAFE ratings.
Salvador G. saw that we’ll be webcasting live next Tuesday from 12:30 p.m. to 2:30 p.m. from the Washington DC show, with a special emphasis on trying to figure out how diesels will fare in the American market, and he wrote in to say, “Since you mention next week’s auto show in DC, is there any way you could tell us who you are going to be talking to, so we can start sending in questions in advance.”
Salvador, we’re still putting that list together, but we’ll be talking to CEOs like Stefan Jacoby at Volkswagen and Johan de Nysschen at Audi, and politicians like Congressmen Fred Upton of Michigan from the Energy and Commerce Committee in the House. And I’m glad you brought this up, because we very much welcome your questions.
And finally, Ron Paris saw that Jason Vines will be returning for an appearance tomorrow night on Autoline After Hours and left this comment: “Oh PULEEEZE; not Jason Vines again! I know there’s nothing I can say to convince you to abandon this folly, John. Suffice it to say, I will skip this week’s show. I’m just not that into megalomania!”
But Ron, it’s hilarious megalomania. And yes, for those of you who didn’t know, the Rambo-like machine gunner we use in the Rapid Fire graphic is none other than that megalomaniac Jason Vines.
And that’s it for today’s top news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.