Episode 35 – Car Sales Hit 10 Million SAAR, Big 3 Now Need $34B, Kia Considers A-Class Car

December 3rd, 2008 at 12:00pm

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Car sales plummet 37 percent in November to a meager total of only 744,000 units. The Big Three say they need a $34 billion bailout. Kia contemplates an A-class car for the American market. All that and more, plus John answers viewer questions about Ford’s restructuring plans and the Chevy Orlando concept in the “You Said It!” segment.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. Car sales plummet in November. The Big Three say they need a $34 billion bailout. And Kia contemplates an A-class car for the American market.

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

This is Autoline Daily for Wednesday, December 3, 2008. And now, the news.

No surprise here, but car sales in the American market were abysmal last month. They plummeted 37 percent compared to a year ago, reached a meager total of only 744,000 units, and fell to an annualized rate of only 10.1 million units. OK, here’s the shorthand on who did the least worst and who really did the worst. Volkswagen’s sales fell the least of all, followed by Subaru, Ford and Honda. All of them gained market share. Those who saw their sales fall the most were Chrysler, Nissan and Suzuki.

More details on the Big Three’s turn-around plans. GM says it needs $18 billion in total. That’s up from the $12 billion it said it needed only two weeks ago. And it needs $4 billion of that immediately, by Christmas. GM says it will now put all its effort into only four brands: Chevy, Cadillac, GMC and Buick. It will cut an additional 31,500 employees, close 9 more plants, and weed out 1,750 dealers.

As we reported yesterday, Ford is going to come out with a battery-electric, van-type commercial vehicle in 2010: my guess is it will be the Transit Connect-but I’m just speculating. And unlike we reported yesterday, Ford said it will come out with a battery electric sedan in 2011, Fiesta maybe? Again, just a guess.

When it comes to Chrysler’s plan . . . man, there ain’t a lot there. We did learn they need $7 billion by Christmas, and maybe there will be more details to follow, but what Chrysler has posted publicly pales in comparison to GM. Hey Chrysler, go look at the GM plan and come out with your version of that.

It looks like Kia will build two models in its US plant in Georgia. Ward’sAuto.com reports Kia is contemplating bringing in the Picanto (subscription required), a small A-class car to the American market.

And just to show you how automakers are getting into every emerging market they can, General Motors is now producing the Chevrolet Lacetti in Uzbekistan (subscription required). According to WardsAuto.com, the Lacetti will be jointly produced by GM and an Uzbek auto company, whose name my mouth can’t even pronounce.

Coming up next, it’s time for You Said It!

And now it’s time for some of your feedback.

This is “You Said It!” Every day we get dozens of comments and questions from you, our viewers. “You Said It!” gives me a chance to respond.

John Thompson writes in to say, “I’m a skilled trades welder for Ford Motor Co. and I am wondering if you might be able to tell me where I might be able to get a copy of the new restructuring plan Ford is offering up this week for hopes of obtaining this new bridge loan.

John, we’re going to be posting links or copies of all the plans on our website later today. You can find it in the John’s Journal section of our website at www.autolinedetroit.tv

And Chris Terry, who saw our report on the Chevrolet Orlando concept vehicle, in which we reported that it would not be sold in the North American market writes in to ask, “Is the Orlando too heavy to fit with the 1.4-liter turbo? When gas prices go back up, why not sell the Orlando in the US?”

Good question, Chris. My guess is it would work with the one-four turbo, especially when gas prices go back up and people want fuel economy again. But with the Equinox or the Traverse in the line-up, Chevy might think it already has enough cross-overs.

Remember, if you have a comment or question you’d like answered, get in touch with us! Just send an e-mail to viewermail@autolinedetroit.tv. But, if you’re feeling really creative, you can post a video comment to YouTube and send us the link. Oh, and if you’re going to send us a video, please try to keep it to around 30 seconds long. Do that and you might just end up on our next installment of “You Said It!”

Anyway, that’s it for today’s top news in the global automotive industry, but don’t forget, this Friday we’re giving away an extra-special prize. It’s a limited-edition, die-cast replica of the 2010 Ford Mustang. It’s part of the Ford Collection, which you can visit at the FordCollection.com. Only 4,000 examples of this 1:18 scale model were made.

To win this model, all you have to do is sign up for our free e-mail newsletter. Just visit our website, AutolineDaily.com, and sign up now. I’ll be announcing the winner this Friday, so don’t delay!

Anyway, thanks for watching today’s show. We’ll see you tomorrow.

17 Comments to “Episode 35 – Car Sales Hit 10 Million SAAR, Big 3 Now Need $34B, Kia Considers A-Class Car”

  1. jim Says:

    John, I know the Big 3′s CEOs are on the hot seat right now, and rightly so. But what about all the well educated, well paid members of the Boards of Directors for those three companies. They have just as much cupability in these companies making poor business decisions over the past decade as the CEOs. Let’s be fair and spread the blame around where it belongs!

  2. pedro Fernandez Says:

    John: is GM losing its mind? get rid of Saturn and keep Buick? Do they see who buys Buicks,a and anyway Saturn has a better portfolio than all except Chevy, What’s you view?

  3. DENIS Says:

    Looking over the Big 3 plans it appears you are still going to lose one third of the people involved with the industry. This will be approx. 1 million! Some rescue plan. I wonder who picks up this tab?…..Can you say Taxpayer.

  4. John Henker Says:

    John, I heard here on a Canadian radio station that Toyota Canada experienced a sales increase of something like 2% in November. Incredible, eh? Can you tell me how the Canadian big three did last month, for comparison?

  5. Ed Says:


    Where does one go for warranty work when a car company dissolves the brand you bought? Other brands still alive from the manufacturer? And how is resale affected when a brand is cut from the company’s portfolio? I have to believe it takes a nasty hit. Thanks.


  6. Les Odgers Says:

    Why is GM keeping GMC and not Saturn, where Saturn has much better Green-brand affiliation and more currently marketable vehicles that get far better mileage and has been getting far more awards than GMC ever will! Who the hell needs a large pickup “truck only” brand now?!!!!? The execs at GM still don’t get it!

    My father, who was a top 5 ranked rocket scientist back when he graduated from Cal Tech in the early 50′s always said: GM has the best engineers in the world but the upper management won’t let them do their jobs.

    One exception is the design on the LS seres motor. It is the best SFC of any motor in it’s HP class and possibly all classes and you can get tons of usable power from it easily.

  7. Les Odgers Says:

    A comment to Pedro: People who buy Buick’s have money and like the different styling and far higher reliability ratings than even Toyota or Honda’s have. Plus you can still get the Buick’s with the Series II 3.8L V-6 push rod motor, which has great usable power and great gas mileage as well! Maybe research more, who needs GMC when all they have is dressed up Chevy trucks?

  8. Les Odgers Says:

    One more thing…We need to look at the Democrat congress back in the mid 70′s who enacted those stupid original CAFE type standards that allowed pickup trucks exemptions to gas mileage and safety standards that all autos had to comply with, thus making these gas guzzlers far less expensive to produce with the safety costs and gas mileage not visible. And giving birth to the large full frame Gas Guzzling SUV’s with some small niche exceptions like the Suburban. I’d like to find out who got rid of the bumper match standards that now allow truck type vehicles to have a bumper even with my children’s heads in my Mini Van!!!???

  9. Jason Says:

    Ford Motor Co., Detroit’s says it’s OK for now. Although it is seeking up to $9 billion in bridge financing, but says it hopes to complete turnaround without accessing the loan should Congress agree to make the funds available. But it wants the ability to access up to $9 billion in government credit. They also said that if GM fails it could take the entire domestic auto industry down with it.

    So FORD needs GM?




    IT’S TIME FOR ‘ROGER and ME 2′!!



    US DOLLARS = Confederste States of America $$$



    FORD yes

    GM maybe

    CHRYSLER hell no!!!

  13. Joe Nagy Says:

    Dear John: RE the Big 3 Bailout; I have the following recommendations:

    All 3 should forget about small to mid size sedans, as the Japanese, Korean and European manufacturers have this area covered.

    Let Ford build PU Trucks, Mustangs and their new Flex wagon.

    Let Chrysler build PU Trucks, Vans and Jeeps.

    Let GM concentrate on one Badge of PU Trucks only, GMC or Chevy, Cadillac, and the Chevy line.

    Possibly Chrysler and GM could get together and combine the Jeep and Hummer lines to further simplify things.

    Thanking you kindly for listening, best regards from sunny Arizona,

    Joe Nagy.

  14. Nick B Says:

    Dear John,
    What is the benefit of GM continuing to concentrate on the GMC brand? To me, it seems like that would be one of the easiest brands to cut. After all, every GMC vehicle has a Chevy counterpart. Why wouldn’t GM scrap GMC and in its place offer a heavy-duty model of the Chevy counterparts that already exist?

  15. John McElroy Says:

    To John Henker:

    According to Ward’s data:
    Canadian sales for November, 2008
    GM -35%
    Ford -12%
    Chrysler -25%
    Toyota +4%
    Honda -28%
    Nissan +3%

  16. John McElroy Says:

    To Nick B:

    I agree with you that there is complete overlap between Chevy and GMC. My guess is that GM wants to keep GMC for two reasons. 1, it makes a lot of money. 2, it’s trying to protect its GMC-Buick-Pontiac sales channel.

  17. steve salis Says:

    The biggish 3 need to go into bankruptcy and the UAW needs to be dissolved. Their cultures need to change (at least in the US). Have you noticed that they seem to do OK where the UAW isn’t involved. They say you have to hit rock bottom before you can make drastic changes for the better. Let them bottom out.

    Based on results, everything the UAW and the biggish 3 have done for the last 30+ years has been designed to reap short term gains at the expense of being competitive in the future. There are many like me who will never buy a car built by the UAW. They do not deserve to be supported.

    The UAW and the biggish 3 will never be competitive, their cultures simply cannot compare to the best.

    I have and will continue to buy cars built in the US by hard working non-militant, non-UAW Americans who are managed by innovative, clever Americans with the help of the Asians.

    With the big three gone, cars will be still be built here. Sure their badges will be different. However, they will be better, their builders, both mgt. and labor will be more secure and for the first time in decades we can be proud of the vehicles built here.