Episode 124 – Saturn May Have Buyer, Opel Can Survive, Gas Prices Headed Higher

April 16th, 2009 at 12:21pm

Runtime 7:15

Investment firm Telesto Ventures is interested in buying Saturn. Opel says it has enough money to survive if GM goes bankrupt. The US Department of Energy says gasoline prices are going to rise over the summer. All that and more, plus a look at the sporty new Hyundai Genesis coupe.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. Saturn may have found a buyer. Opel says it can survive on its own. And gasoline prices are headed higher.

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

This is Autoline Daily for Thursday, April 16, 2009. And now, the news.

An investment firm is interested in buying Saturn, the Detroit News reports. Telesto Ventures says it wants Saturn, and would have GM continue building the current models through 2011. Then it would get other automakers, (Chinese perhaps?), to build cars to sell under the Saturn brand through its 439 dealers in North America. By the way, Telesto is the name of one of Saturn’s moons.

Meanwhile, Bloomberg reports that GM may drop its Pontiac and GMC brands to further cut costs. That would mean more layoffs and plant closings as GM struggles to avoid a bankruptcy, if possible. But I don’t understand this story. GMC is still profitable, so why would you get rid of it?

The U.S. Energy Department say gas prices will hit an average of $2.23 a gallon this summer. According to USA Today, prices will peak at $2.30 during the summer, and hit $2.42 in 2010. Diesel is also expected to stay at $2.27 this summer, rising to $2.69 next year.

Opel says it has enough money to survive if GM goes bankrupt. According to the AFP, the German automaker has enough cash to continue operations for the next four months. The company has benefited from strong sales of its new Insignia model and also a cash for clunkers program offered in Germany. Even so, Opel is seeking 3.3 billion Euros in aid.

Tuk Tuks are motorized, three-wheeled rickshaws. They’re popular in Asia, and they may soon go on sale in America. Tuk Tuk USA just got approval from the DOT and EPA to sell vehicles in the U.S. It plans on offering 14 models, including a 12-passenger bus and even a garbage truck! Under the hood, or rather, under the seat, they’re powered by a 650 cc water-cooled, four-stroke engine and feature a four-speed manual transmission. Prices start around $10,000 and run up to about 15 grand for high-end models. Autoblog reports they should get about 55 miles per gallon – that’s 4.2 L/100 km.

Recently GM announced that it plans to double its sales in China by 2013. That’s a goal of 2-million units per year. To hit this target, Gasgoo.com reports that the company may have to build another factory. It already operates seven joint-venture facilities in China, five with SAIC and two others with SAIC and Wuling. GM hasn’t committed to investing in an eighth plant yet. It could try to squeeze more volume out of its existing facilities.

Coming up next, a look at the sporty new Hyundai Genesis coupe, we’ll be back right after this.

Hyundai is aiming its brand-new Genesis Coupe right at the heart of the ponycar segment. Traditionally this slice of the market is red, white and blue American-only territory. But now the Mustang, Camaro and Challenger have some serious competition. Autoline correspondent Isaac Bouchard reports.

Thanks for that report, Isaac. The Genesis sedan is a pretty impressive car, and the new coupe version of it looks like a lot of fun. Can’t wait to drive it myself.

Join us tonight for Autoline After hours, a live webcast where we talk about the issues in the auto industry and give our opinions on cars and brands without any of the veneer or flashy production you get from traditional media. Joining me, Jason Vines and Peter DeLorenzo will be Michael Benovsky, with vLane.com and who seems to have the biggest automotive following on Twitter. That’s tonight at 7 p.m. Eastern, or 2300 hours Greenwich Mean Time at AutolineDetroit.tv.

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

22 Comments to “Episode 124 – Saturn May Have Buyer, Opel Can Survive, Gas Prices Headed Higher”

  1. G.A.Branigan Says:

    GMC and Pontiac out.For a seriously injured GM,I think it’s a good move.Hyundai is showing something to the world,good on you and I wish you success.Tuk Tuks trucks,I like it.beats the crap out of that “wheelchair” crap.LOL.It’s funny now Opel can survive if GM goes BK,Hmmmm.Makes you wonder how much of the bailout,oh excuse me….loan was actually needed.As I said before,they all had their hands out till the feds told them they would be accountable.Too bad they didn’t do that to the banks and AIG losers from the git go.Hey John,ya didn’t give me any ammo so I could bash the loser UAW/CAW.Maybe tomorrow ;}>

  2. pedro Fernandez Says:

    John: Chinese-made Saturns? WOW, change the name to Uranus, cause that’s what you’re gonna be kicking on yourself if you buy one. Also the new Genesis points out just how far behind in technology the big 3 are, they bring back 3 blasts from the past, and they already look antiquated.

  3. Denis Says:

    Hey John…GM is being forced to kill the GMC brand because they need to distant themselves as far as they can with any thing with the GM logo because of all the negativity associated with GM lately. Over the past decades they have slowly killed the GM brand with mis-management and compromised products. The last thing they need is to drag down Chevy and Cadillac with looming bankruptcy talk, bailout money, govt. interferance, $20 million retirement pkg. for Wagner, etc. etc. You will probably see a sub brand of Chevy or Cadillac for premium Trucks/SUV’s …Denali maybe ?? It is a brand considered more premium than GMC…More BLING BLING !! Which should equal more $$$$

  4. G.A.Branigan Says:

    @Pedro…..LMAO.Your right about saturn,the chinese want that one bad.The “new” Mustang was and is a big hit,retro looks and very modern drive train and suspension.The new camaro and challenger are,I think,a day late and a dollar short.They cost a lot more then a Mustang GT and at least for the camaro,a crummy plastic interior.I looked at the challenger and it’s nice,but not 45k nice if you know what I mean.I wonder if there will be anything but Ford left when all is said and done.”Whats good for general motors IS good for the country”,what a laugh then and now.

  5. Chris Hail Says:

    Why not kill GMC? Wouldn’t almost all of the buyers migrate to Chevrolet trucks? GM would be able to take out an extraneous management and support staff and probably realize some savings in advertising. If they minimize or kill Buick and Pontiac, they won’t have a dealer body to support GMC anyway. Hmmm…Chevy, Buick, Cadillac. Sounds kind of like Ford, Mercury, Lincoln, doesn’t it?

  6. pedro Fernandez Says:

    G.A.: Tuk Tuks, Tatas, Chinese Uranus,PUMAS, What the hell is this world coming to? I can see in 10 years, we’ll be getting around in these tin cans and the Chinese will be driving their Buicks and the arabs their Hummers, laughing their asses off at our expense, but forgive me< I’m a pessimist.

  7. Tony Gray Says:

    Killing GMC would be a waste if not justified by the numbers. I thought GMC was a profit center for the General.

    First, it appears lots of folks prefer GMC to Chevy, for whatever reasons. Second, GMC trucks tend to sell at a higher content level and price point, thus more profit. Even if 100% of the GMC sales went to Chevy, overall GM profit would fall, and I doubt this would make up for the cost reductions by eliminating whatever management, marketing and support staff the brand has.

    Next, what kind of light duty truck option will Pontiac/Buick dealers have? Will GM force Chevy Truck into its own channel so they can be sold there? Will they just rebadge GMC as Buick Truck? I suppose they could develop a new unibody truck similar to Honda, that may cater to the Buick demographic, but I’m not certain.

    I don’t claim to know the answers, but making decisions (or being forced to) without empirical data is what got us in this pickle and it sure won’t get us out.

  8. Dan Clemons Says:

    Right now GM is losing money on every car it sells. Until they solve legacy issues, they will not be in business for very long. GM can no longer afford to continue paying furloughed UAW workers 90% of their salary for not working. You can’t run a business where it takes 7 UAW workers to do five jobs.

  9. pedro Fernandez Says:

    If they’re keeping Buick, why not sell GMC at those dealers as a “nicer” truck than Chevy or if they don’t keep Buick,then sell them at the Caddy dealers like they did with the Hummer. ps Hyundai seems to know what buyers want, better than even the Japanese brands, while Honda and Toyota have almost gone 100% FWD, Hyundai realizes that FWD is CRAP and most drivers prefer RWD and if your need traction, There’s 4 wheel drive. More RWD in future cars please!!!

  10. Tom Cain Says:

    How do you make a Tuk Tuk meet U.S. safety regulations???

  11. craigerzgt Says:

    @ Tony Gray:

    How do you justify that, given a 100% transferrable customer base from GMC to Chevy, that GM would earn less money? You would have the same overall sales with less marketing and fewer employees engineering two vehicles which are essentially the same. The only way that GMC should be kept alive is if GM put all trucks and SUVs into GMC, Chevy for cars, and Caddy for luxury. But the Silverado/Suburban etc nameplates do have a following as well. Have to bite the bullet and go one way or another somehow, and I like the way they seem to be going.

  12. Alex Kovnat Says:

    When I heard the news that Saturn is to be sold, I could have said “I told you so”.

    IMHO, Saturn never should have been organized in the first place. So why was it?

    In the mid-1970′s when Congress passed corporate average fuel economy laws, GM and the other automakers wanted to, and were planning to, meet their small car obligations by importing them from Japan, Korea or Europe. But the UAW intervened, and as a result the CAFE laws were re-written to require small cars to be built domestically.

    I cannot emphasize enough how irrational a decision this was. It would have been much better for Chrysler (especially!), GM and Ford to have been allowed to import small cars from Japan, Korea or elsewhere, and use high-wage, UAW union shop factories in the US (especially up north in Michigan) solely for high-profit large vehicles.

    Look at what the UAW’s demands have led to: The Plymough Horizon/Dodge Omni was never a match for Japanese small cars. Chrysler would have been better off if they had been allowed to have the Omni/Horizon made in Japan or Korea, where costs are lower and quality higher.

    Regarding Saturn: I owned a 1997 Saturn SL1 from July 1997 to early 2005. As 2004 drew to a close, I decided to get rid of it and buy a Toyota, because I was sick and tired of my Saturn nickeling and diming me to death with constant repair costs.

    Nowadays, we are hearing all kinds of pleas to buy American. I have been saying this for years, that its enough of a frustration as it is for the auto industry to be squeezed to death between fuel economy and safety. We don’t need to squeeze the road-going American citizenry further with local content requirements or limits on availability non-USA-built cars.

  13. JIm Thykeson Says:

    You know its something on this higher gas prices. We should have all the GASOLINE;a.k.a. petrol we want. By converting most of the vehiculer fleets of Russia and Europe to natural-gas the middle east and the petrol companies will only have north America to exploit. Russia is kissing off it’s dependence on middle-=eastern oil by expanding Gazproms prominence into the alternative fuel of NOW!; natural-gas. God!, is this country dumb-ass.

  14. pedro Fernandez Says:

    Right on Jim, and don’t forget Brazil with their ethanol, they have become practically free from foreign oil. Here, its one excuse after the next, coal: too dirty Gas: not practical. Nuclear: too dangerous. e85 too expensive to produce and then we won’t have enough food ect, ect. Here we could grow corn up north and west and in the south sugar cane. Quick history lesson re. Saturn, it was Roger Smith’s brainchild. It was to prove that they could build a small car as good as the Japanese. WEll history has proved they could not. When the car was finally launched, the competition was one generation ahead already, so the car was already outdated. All that money and they only came up with one model and not a very good one at that.

  15. G.A.Branigan Says:

    Kind of makes you wonder just who’s interest is being served by our govt.It seems to me that most people are more worried about being PC,then they are about the downfall of american infrastructure.There is an abundance of viable alternative fuel sources that most americans,including our new king,ignore.Watch china and see.

  16. Richard Sutherland Says:

    John,
    Why would GM kill GMC? Very simple, Because the new CEO Obama wants them to concentrate on unprofitable and unwanted modes of transporttion. Rather than profitable ones that he dosen’t like.

  17. C-Tech Says:

    Hmmm. Curious, the Saturn SL1 and SL2 were hailed as well-built small cars. Saturn built a loyal following on those small cars, how they were sold (remember “no-haggle”?), and great customer service. Why didn’t that translate throughout GM? Chrysler made a TON of cash off the PT Cruiser. Ford makes money off the Focus. All of these vehicles built by UAW workers. Is the problem truly just the UAW? As far as älternative fuel” goes, is the problem more so where can I get it, or where can I get a vehicle that uses it?

  18. Salvador G. Says:

    I’m glad Hyundai finally come in out with that new genesis, big fan since I saw it as a concept, consenquentially; I was pretty sure when Nissan came out with the GTR the American pony car was 7 feet under, its just that those bastards decide on a limited production of GTR’s.

  19. Tony Gray Says:

    #11 craigerzgt:

    My point was profit per vehicle. GMC Trucks consistently sell for more than their Chevrolet counterparts, whether for a higher number of options or just because those folks are willing to shell out a bit more coin for the “Professional Grade” model. So even if every one of those GMC buyers could be convinced to stay with Chevy (doubtful), then you would have less profit to deal with. Would this be offset by less money spent on marketing, design and overhead? Could be, but I doubt it. They really don’t spend much to change the Silverado, etc into a Sierra and they can easily streamline their marketing to piggyback onto the Pontiac-Buick channel.

  20. Jonathan Says:

    #10 Tom Cain

    The Tuk Tuk is three wheeled and therefore concidered a motorcyle

  21. G.A.Branigan Says:

    I don’t believe the 12 passenger Tuk Tuk will be considered a motorcycle,nor the garbage truck.

  22. jerry flint Says:

    buy saturn? come on. what is to buy and what is to sell? i can’t see anything. can you. how many vehicles will saturn sell this ear. 60,000? if anyone wants the dealers they can contact them. if the dealers want to talk to anyone, renault, fiat, the dragon lady, terry and the pirates, they can pick up the fone. no need fpr any middlemen.

    and uick-pontiac-gmc? gm said it would wash out pointac and buick is fading fast. how will the dealers live? they are gone with the wind.

    regards and your daily reports are exellent.
    jerry