Episode 397 – Opel’s Unions Agree To Cuts, Toyota Packages Are Harmless, Tesla To Build At NUMMI

May 21st, 2010 at 12:00pm

Runtime 6:24

Opel is close to a deal with its unions in Germany and Belgium to reduce its workforce and cut labor costs. Several suspicious packages sent to different Toyota plants in the U.S. turn out to be harmless. Tesla will use the recently closed NUMMI plant to assemble its new Model S sedan. All that and more, plus a preview of this week’s Autoline Detroit with Tom Stallkamp, a former executive at Chrysler, and what he thinks about the sales recovery going on in the American market.

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Transcript and Story Links after the jump . . .

It’s Friday, May 21, 2010, and here’s what’s going on in the car world.

OPEL’S UNIONS AGREE TO CUTS
In a very important development for General Motors, Opel is close to a deal with its unions in Germany and Belgium to reduce its workforce and cut labor costs. The AFP reports that Opel’s unions have agreed to pay cuts, closing an assembly plant in Antwerp and shedding 8,300 jobs. However, GM’s full restructuring plans for Opel require €1.8 billion in government money, mainly from Germany, and getting that money is still uncertain with European governments having to pour billions of euros into the Greek economy.

NEW FUEL REGULATIONS ON THE WAY
The Obama administration is pushing for fuel-economy standards on medium- and heavy-duty trucks. The Detroit News reports that the Administration wants new fuel regulations in place by 2014. It also is working on a CO2 standard for later in this decade, all with the idea of preempting the state of California from enacting its own separate rules, so that automakers only have to deal with one set of regulations.

FALSE ALARM
Earlier in the week we reported that the FBI was investigating several suspicious packages sent to different Toyota plants in the U.S., but it turns out they were harmless. According to the Charleston Gazette, the packages were sent by a Nigerian man claiming to be an engineer and they contained test models for a turn signal he invented. The packages caused a scare because they contained wires and electronics, did not include a return address and came with a postmark from outside the country. The FBI doesn’t plan to contact the man or charge him with anything.

LEAF PRICING EXPLAINED…SORT OF
On Tuesday we reported on the cost of the Nissan Leaf and how it will be priced much higher in Europe than the U.S. Well, Nissan contacted Autoline Daily and gave us this explanation. Europe’s import duties are higher and shipping and handling costs are not included in the U.S. price. Also, the European price includes a value-added tax and the U.S. price quote is before taxes. That does explain why the price would be higher in Europe, but if you also remember, we reported that the price in Japan will be much higher than the U.S., but Nissan didn’t explain that difference. Maybe that’s explained away with taxes, but we’ll just have to wait for that explanation.

TESLA TO BUILD AT NUMMI
Toyota and Tesla are teaming up to build electric cars, sort of. The Japanese automaker is investing $50 million in the Silicon-Valley startup, which will use the recently closed NUMMI plant in California to assemble its new Model S sedan. Seems to me this is all about public relations. The NUMMI plant is a gigantic facility, far in excess of what Tesla needs. But this deal makes it look like Toyota is helping bring jobs back to NUMMI even though Toyota is not at all involved in building cars at the plant.

LEAR’S NEW ECO PRODUCTS
Supplier company Lear just announced that it’s developed a new type of vehicle seat, one that it claims is up to 25 pounds lighter. That’s a huge amount of mass to cut out of a seat! Not surprisingly, the weight savings start right at the chairs’ foundation. Lear’s new ECO frames are up to 30 percent lighter than conventional seat structures. Besides saving weight, Lear is also pushing innovative and environmentally friendly technologies – things like soybean oil-based foam padding, and its new ECO Fabric that’s made from 100 percent recycled pop bottles and polyester yarn. Look for the new “Evolution Seat” as it’s called to debut in Asia sometime next year.

Looks like new car sales are getting better in the American market. But here’s one automotive executive who hopes that the market does not come quickly roaring back. Now, why would he say that? We’ll have the answer in just a matter of seconds.

Tom Stallkamp was the former president of Chrysler, on the board of DaimlerChrysler, and is now with the private equity firm Ripplewood Holdings, which still keeps him heavily involved in the automotive industry. I wanted to know what he thinks about the sales recovery going on in the American market. Let’s go to that clip right now.

You can hear that entire interview with Tom Stallkamp, my guest on Autoline Detroit this week. Also joining me on that show are Edward Lapham from Automotive News and Neil Boudette from the Wall Street Journal. And you can catch it all at our website, autolinedetroit.tv.

And that’s it for today’s top news in the global automotive industry. Thanks for watching, have a great weekend and we’ll see you on Monday.

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

20 Comments to “Episode 397 – Opel’s Unions Agree To Cuts, Toyota Packages Are Harmless, Tesla To Build At NUMMI”

  1. G.A.Branigan Says:

    IF….the obama administration really wants to push thru emissions AND fuel economy standards,they should start looking at clean diesels and bio-diesel as a fuel for everything diesel powered.Leave the gas to a can of beans.

  2. Salvador G. Says:

    I get what Tom Stallkamp is saying about the industry don’t being able to keep up with fast increasing demand, but wasn’t a big problem for the industry to have too many suppliers – current suppliers still don’t have the capacity for massive demand, but the ones that remain are the ones that still able to get money to expand and increase production.
    - I think I rather say… the cup is half full.

    Also, Does that mean Toyota is basically wasting money just to have the lights-on at the NUMMI plant??
    -Who was the smart PR guy who came up with that one?

  3. Salvador G. Says:

    50 million, really; hope they’ve sign up for some intellectual property out of that one.

    50,000,000.00

  4. Chuck Grenci Says:

    I agree with Tom Stallkamp, and in addition to the reasons he stated, a more linear growth would/could/should creat an atmosphere for a more structured growth (meaning the capacity would be sustainable with good business practices and well-propped, instead of fly by night, wanton production).

  5. EAB Says:

    I went to McDonald’s this morning to get a sandwich before I went to work. The counter was deserted but the drivethrough had 10 cars waiting, and all of ‘em were idling. It was then I got a brilliant way to lower polution and greenhouse gases and fight the federal deficit. How about a 10% tax on all drivethrough purchases? They could work some sort of waiver for people with children or disabled in the car, but for the lazy morons I saw this morning, why not?

  6. Nick Stevens Says:

    That does not sound like either FAST or good food, with 10 cars waiting. Apparently gas prices are not high enough at $3…

    The culinary illiteracy where I live is mind-boggling. I have seen Lexus LS400 and LS430s parked at.. Mcdonalds parking lots.

    And why is there need to ever buy anything from that place? The best way to see what kind of upper crap their food is, is to buy it and let it get cold, and try to eat it an hour or two later.

    You can always do much better by shopping once a week, buy some good healthy all-wheat bread and some choice cheese and ham, turkey etc slices, and take your own sandwiches to work.

  7. Nick Stevens Says:

    I meant utter, not.. upper crap!

  8. Nick Stevens Says:

    The industry should cut the addiction to incnetives. In the past, mainly because of the mature of the agreements with the UAW, it made sense for GM and the orher domestics to produce many more vehicles than the market wanted, and then force them to buy them by selling them dirt-cheap. Now the buyers always expect incentives, and if there are not any, they just WAIT.

  9. HyundaiSmoke Says:

    I say 50 MPG pass cars, and 35 MPG for medium duty trucks, and all NEW Heavy duty trucks should be forced on CNG.

  10. HyundaiSmoke Says:

    It looks like its going to that, as Obama said that his goal is for cars to use half the fuel they do today in 20 years from now.

    If the fleet is already about 25-26 MPG, then yeah it wouldnt be a shock to hear 50 MPG CAFE by 2030 in Headlines everywhere soon.

  11. C-tech Says:

    For Nick, there is nothing wrong with eating at McDonalds. Don’t try to be such a snob and ass. This is a free country with freedom of choice. If you want to pack a lunch, enjoy yourself. There is no reason to insult people who don’t share your taste or choice of fare.

  12. Nick Stevens Says:

    I was about to say how WISE Tom Stalkamp’s comments are this week, and how fully qworth he is the millions he used to make as an Auto Executive,

    when I saw this idiotic post no. 11 by C-tech, so I have to respond to this clown first:

    Hey C-tech: Heads up: THE SAME FREEDOM THAT Allows YOU TO SPEAK WITH YOUR ASS INSTEAD OF WITH YOUR MOUTH AND BRAIN, AND CALL ME of all people “A snob and an ass” which I never was,

    that same god damned freedom allows me to correct your nutritionally illiterate, pea-sized uninformed brain and tell you that if you do not already KNOW that Most of the crap Macdonalds sells is indeed some of the most harmful sruff you can possibly eat, and how anybody, even YOU, can go to the supermarket and make your OWN FAR BETTER sandwich with FAR superior ingredients and for HALF the cost,

    Then there is no damned hope for YOUR ignorant ass.

    I have as much right, and possibly MUCH MORE right than the uninformed like you, to comment on it and give LIFE SAVING ADVICE, and if you are SO EFFING DUMB as to really believe there is nothing wrong with that fried crap you eat at McDonalds, then why not, let’s try DARWIN and NATURAL SELECTION, soon our collective IQs will be higher!

  13. Nick Stevens Says:

    And the only downside for the rest of us will he that we will pay the far higher health care costs, now that health care is allegedly “free” (aka, paid by the successful in our society instead of by the patients).

    BAck to Tom Stallcamp: Excellent Show, John. Congratulations!

    TOm basically admitted to everything that we the critics of the domestics have been saying for 20 years (if not 30!), people like the Autoextremist who does come from a GM family but who did understand how terribly wrong GM was going about its business…

    It would be so much better if these execs admitted these faults when they were in POWER, though, and did something about it..

    TOm’s description of the auto company culture in Detroit the last 30 years as that of the Catholic Church is quite appropriate..

  14. Nick Stevens Says:

    Today’s LS460 is 1,000 lbs heavier than the original, far more powerful, bigger outside and inside, and luxurious, and has far, far better pefrormance. The 8-sp auto transmission, that some here think is unnecessary, allows it to get 24 MPG HWY, better than the 5 speeds on far less powerful cars make.

    I wonder how cheaply one will be able to buy this thing 5 or 7 years old and with over 100k miles. I doubt it will be cheaper than a 7 series, which is close to 100k new today. (Mostly due to the perception of much better reliability for the lexus). So I hope COngress badmouths toyota and lexus enough so I can buy it as cheaply…if my 7 misbehaves 5 years from now..

    Price: $73,750
    Engine: 4.6 liter V-8
    Horsepower : 380
    Torque: 367 pound-feet
    Redline: 6,600
    Transmission : 8-speed automatic
    EPA gas mileage : 16 mpg city / 24 mpg highway
    Fuel type: Premium
    ..
    Dimensions:
    Wheelbase: 121.7 inches
    Length: 203.9 inches
    Width: 73.8 inches
    Height: 58.1 inches
    Ground clearance: 5.7 inches; 5.3 inches with all-wheel drive
    Wheels: 19 inches
    Interior dimensions
    Front/Rear
    Headroom: 38 inches / 38 inches
    Legroom: 43.7 inches (rear too!?!!)

    Trunk space : 18 cubic feet
    (Far bigger than S-class or 7 series of the past!)
    Curb weight : 4,460 pounds to 4,645 pounds
    Fuel tank : 22.2 gallons
    Performance numbers:
    0-60 mph: 5.4 seconds (!!!)
    ..

    From The Detroit News: http://www.detnews.com/article/20100522/AUTO03/5220313/1148/AUTO01/Lexus-LS-is-backseat-drivers–delight#ixzz0ofBfR9Yt

  15. pedro fernandez Says:

    Nick I never thought you would consider a Lexus after so many years of driving a German car with its European suspension vs the floaty LS. I have driven a couple of older LS’s and even with the miles and all they were solid and rattle free, although a bit soft riding, maybe the struts were worn.

  16. Nick Stevens Says:

    Pedro,

    I only have been driving large German V8 cars for 5 years. My first car, a WV Dasher(=passat) wagon was so unreliable, it made me not buy german again for two decades. I was happy with both the hondas.

    I did drive the first LS400, it had over 100k miles and the owner was asking 11k for it, did not like its ride nor its interior much. Then a colleague had a 430, it had a fantastic interior, better than any living room I’ve seen, but had that isolated ride, it rode like a… living room! But then lexus also offered a Sports version of the new LS. It costs $6k more than the base LS, but it should be worth it. I may not even need it 5 yrs from now, when I am older and more conservative driver and cannot afford a car that may break down.

    I think I have been lucky with my 7 so far and may not be as lucky for another 5 years, the car already has 133.5k and is 12-13 yrs old. And what I hear from even older, simpler Mercedeses that were never driven in bad weather is not good, expensive repairs. While I have not heard any horror stories from LS owners, the opposite.

  17. Nick Stevens Says:

    It will also depend on the price. When I bought the 7, LS400s and 430s were twice the price used, for the same miles, (that’s the reliability talking!) and when they were new they were cheaper than the 7!

  18. paulstewart Says:

    “Finlandia, O’ Finlandia” as Groucho sings !

  19. Nick Stevens Says:

    stewart:

    i am a big fan of both groucho and sibelius’s ‘finlandia’, but what is the link between the two??? you have said it before with no explanation, but back then i did not bother,

    ps do you want fries with that?

  20. Nick Stevens Says:

    I just reserved a rental sedan for a 3 day weekend, I am used to business weekday reservations that are quite expensive, and was not aware how dirt-cheap weekend rates are. (If I rented an economy car from Hertz I’d only pay $50 for ALL 3 days total! So I reserved a Malibu-Mazda6(preferred)- Optima-Sentra (I hate the last one, and it is not even in the same size class) or Impala (which is bigger but they group it here) for a total of $70 for 3 days. As it happens Hertz gave me a $100 customer satisfaction certificate whose one year duration is ending, and it not only fully cover my rental 9$70 includes EVERYTHING) but I’ll uise the $30 remaining to buy a tank of gas, which they always offer, since othwerwise I’d lose it.

    The only downside is this location I will have to rent from does not offer Hybrids or GPS…