Episode 721 – Suzuki Wants to End VW Alliance, Camaro ZL1, BMW Patents Twin-turbo V-6

September 12th, 2011 at 12:02pm

Runtime: 8:03

Suzuki is seeking to end its alliance with Volkswagen after the German automaker accused it of breaking the terms of the partnership by purchasing engines from Fiat. GM released power numbers for the Chevy Camaro ZL1. The ponycar delivers 580 horsepower from its 6.2-liter supercharged V-8. BMW patented a design for a twin-turbocharged V-6. All that and more, plus guest host Rod Meloni from WDIV Local 4 News, Detroit, explains why he doesn’t believe we will see a strike from the UAW.

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It’s Monday the 12th of September, 2011 and welcome to Autoline Daily. Rod Meloni, Business Editor at WDIV Local 4 News, Detroit, filling in for McElroy again, who’s in Germany right now covering the Frankfurt Motor Show. Good luck, John! Don’t work too hard. And while we’re on the subject of Frankfurt, just a friendly reminder we’re doing a LIVE webcast tomorrow from the floor of the show. It starts at 10:00 a.m. Eastern Time. We’re using a neat piece of technology from a company called LiveU. It’s a portable backpack that allows us to move all around the show floor to bring you the latest, so check it out. Anyway, on with the news!

SUZUKI WANTS TO END VW ALLIANCE
Suzuki’s partnership with Volkswagen just went from bad to worse. VW accused the Japanese automaker of breaking the terms of the tie-up by purchasing engines from Fiat. Suzuki denied there was a violation and is now seeking to end its partnership with the German automaker. Suzuki’s chairman, Osamu Suzuki, is quoted as saying “We should just have a simple break up with a smile and say we weren’t meant for each other.” But it doesn’t sound like it will be that easy, VW has already come out and said it doesn’t want to end the alliance and it won’t reduce its 20 percent stake in Suzuki.

FORD LOWERS FORECAST
Ford has downgraded its industry-wide sales forecast for the year in the U.S.  Earlier the company said sales would fall between 13 and 13.5 million units in 2011, but now Ford says sales may not hit 13 million. According to Bloomberg, most analysts see sales coming in around 12.7 million units for the year.

LOW INVENTORY IN U.S. (subscription required)
And maybe that’s because there aren’t enough cars to buy. Ward’s reports that inventory in the U.S. is still too low with only a 49 days’ supply at the end of August. The Asian automakers are hurting the most, they only have a 35 days’ supply.

FORSTER QUITS TATA
Indian automaker Tata, which also owns Jaguar and Land Rover, is scrambling to find a new CEO. Last Friday, Carl-Peter Forster quit the company after less than two years on the job, citing unavoidable personal circumstances. One of the challenges for the new CEO will be turning sales around at Jaguar whose sales have fallen six straight months.

CAMARO ZL1
I have a hard time remembering yesterday, let alone February, but if you recall, last winter at the Chicago Auto Show GM pulled the wraps off a new Camaro model, the ZL1. Now, the company’s finally released more information on this top-dog ponycar. Its 6.2-liter supercharged V-8 delivers a whopping 580 horsepower! That gives the ZL1 a better power-to-weight ratio than a Porsche 911 Carrera GTS. The car is available with either a six-speed manual OR automatic transmission. Helping put all of that power to the ground, it features the latest version of GM’s magnetic ride control system, which can adjust the shock damping 1,000 times per second! No pricing or availability information has been released, but you can expect it to be “expensive” when it comes out “later.”

BMW PATENTS TWIN-TURBO V-6
Is a BMW even a BMW if it doesn’t have an inline-six under the hood? You could argue one way or the other, but one thing’s for certain, V-6s are strictly VERBOTEN, which makes this next story puzzling. We picked it up From Autoblog who found it on a 3 Series forum. Apparently the Munich-based carmaker patented a design for a twin-turbocharged V-6. The application is in German, you can check it out for yourself, just hit the link in today’s show notes at Autoline.tv. All I can say is there’s some wacky stuff going on in this business right now.

AUTOMOTIVE ART
There’s more than one way to recycle rusted-out old vehicles. An artist in Finland has found a way to turn them into art. Her name is Miina Äkkijyrkkä . . . well, we’ll put her name on the screen if you can pronounce it, but she’s built a couple massive sculptures of cows. Why bovine? I’m not sure, but they are pretty cool looking.

Coming up next, some of my thoughts on the UAW contract talks. Stick around.

UAW STRIKE UNLIKELY
Wednesday is the deadline for the UAW and the Domestic Three to negotiate their new, four-year-long national contract. It’s possible they could get the GM deal by then, Chrysler’s is fairly close behind and they won’t have a deal with Ford by then. So, as is the usual practice, they will extend the deadline.

Still, it’s a good idea to remember GM and Chrysler have no-strike clauses as part of their bankruptcies, which makes it far simpler to come to terms. Ford does not. But that is NOT the reason Ford sits in third right now. You see . . . there will be no strike this time around as we saw four years ago.

By its very construct, the strike is a nuance-free zone. The UAW used to use its strikes as a way to show 1) it’s still around, 2) it can still shut the companies down on a whim and 3) in the end, it can force its will whether the true purpose is to gently step on a few toes or bloody a nose. Striking during a national contract negotiation often led to hitting a mosquito with a sledge hammer, done just because it could.

The world’s changed and I say there will be no strike this time around. I also say it has nothing to do with no-strike clauses or Ford’s slower pace. It has everything to do with the transplant plants in the U.S.

Now, you might wonder how since they have no skin in this game. Well, here’s how: UAW President Bob King said this year, in a telling bit of truth, that if he and his team do not organize the transplants, the UAW’s future is grim. King NEEDS to organize at least one transplant plant to show it’s possible. So far, it hasn’t been. So King will do whatever it takes to get his national contract with the Domestic Three strike-free. This can show the transplant executive teams they have nothing to fear from the UAW because it is willing to work with them to make certain the business thrives. It is also meant to show transplant workers, who have previously shown no appetite to get involved with the UAW, they can benefit from UAW membership.

Now, inside the UAW there are a lot of members and leaders who see this as a losing strategy. How do you convince transplant workers that their lives will be better and their pay will increase with a national union so willing to work with their management to make certain the business survives? Many do not see where there is added value for that transplant worker. But, this is King’s strategy and he’s sticking to it.

So, even if you see a headline of a possible strike threat against Ford in the coming days or even weeks, don’t buy it. The UAW hasn’t struck Ford individually since the 1970s and William Clay Ford Jr. has touted the company’s good relationship with the UAW for a generation. Still, just remember that none of it has anything to do with the current situation. Bob King is looking to Ohio and Kentucky, South Carolina and beyond where he sees thousands of dues-paying members in his dreams. Perish the thought of a UAW strike this time around.

And that brings us to the end of today’s show. Again, I’m Rod Meloni, WDIV Local 4 News, Detroit. Thanks for watching – or listening if you downloaded the podcast-version of this program. I’ll see you back here again tomorrow same time, same place. Take care!

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25 Comments to “Episode 721 – Suzuki Wants to End VW Alliance, Camaro ZL1, BMW Patents Twin-turbo V-6”

  1. jesse Says:

    THAT ZL1 SOUNDS VERY EXCITING!!Now I have to wonder what the next CORVETTE will bring if the Camaro is going to bang out 580 hp!!! Of course the price will be high..the UAW needs to get paid!!!

  2. pedro fernandez Says:

    Boss 302, now this, are we getting into another horsepower pissing game? with $4.00 gas here to stay and only go up, I just don’t see the enthusiasm among prospective buyers, people are looking into mpg numbers before buying. Besides who needs 0 to 60 in 4 secs in the real world?

  3. Chuck Grenci Says:

    The ZL1 will just be a special issue vehicle (limited production); the price is surely going to be in Corvette territory but there will be Camaro fanatics that must have one. As a special edition it’s not going to waste (too) much gasoline; no different than all the ‘Snake/Cobra’ Mustang editions (except only cooler) :)

  4. Jon M Says:

    Great job, Rod. I would have to agree with you on the strike option between the UAW and Ford. My guess is that some, if not most, of “transplant” plants are not too cozy with the idea of unionizing. Perhaps Honda and Toyota may be the biggest hold outs, but I can’t say for sure; either way, good luck lobbying the “transplants” when you’re battling with management in a picketing labor dispute. As for my opinion, I hope they all show Mr. King the door. This country would be better off without the counter-productive UAW!

  5. MJB Says:

    @2

    “Besides, who needs 0-60 in 4sec in the real world?”

    C’mon Pedro. Who needs a Porsche? But they still sell.

  6. pedro fernandez Says:

    Correct me if I’m wrong, but most people who buy Porsche-type cars do so as a second car, a weekend toy, usually not their schlep to work, every day vehicle, people who buy American muscle buy them as their everyday vehicle. And if you look at the big buck folk, they go for the exotics.

  7. Kit Gerhart Says:

    Low inventories:

    Having not much to do, I visited my “local” (40 miles away) VW, Mercedes-Benz, Audi dealer today, and they low inventory of each brand’s cars that might appeal to me. They had no TDI Golfs, and only one Golf of any type. They had two Jetta wagons, but the one that was a TDI but was “overloaded” with options. There were no A3′s and no E-Class diesels.

    They did have a tj car, though, a white GLK350 4Motion. It looked pretty nice, but $43K and 16-21 mileage ratings? I’m not ready for that just yet.

  8. Kit Gerhart Says:

    Pedro, #6,
    People buy Porsches mostly as expensive toys, but that is also the case with the “special” versions of Mustang and Camaro, like the ZL1. I do know one person who uses an SRT-8 Challenger as a daily driver, but that car is not as “extreme” as the ZL1.

    People buy the “regular” pony cars, especially the six cylinder version, as daily drivers.

  9. dcars Says:

    The UAW’s tactic of threatening to strike is a bad decision. What company wants to “bargain” with someone that pulls out shotgun and holds it to your head and says don’t worry I don’t intend to shoot! This is not good business.
    The VW plant is the only plant that will sign with them and not because they want to, it’s because they will have to comply with their German Union’s demands.

  10. Kit Gerhart Says:

    Hmm…
    It looks like BMW is finally going to join everyone else on the dark side, with 6 cylinder engines full of band aids like splayed crank pins and balance shafts. Mercedes held out for a long time, but even their 6 cyl. diesel went V a few years ago.

    Volvo seems to go back and forth between V-6′s and in-line, and sometimes have both at the same time. I suspect having both at the same time is what BMW will be doing for a long time, if this new V-6 makes it to production.

  11. Rob Grosse Says:

    Perhaps Jaguar needs differentiate themselves a bit more in order to counteract diminishing sales. Perhaps go retro with super long hoods and a modern version of straight 8, or a straight 12 or something. Now that would be cool!

  12. pedro fernandez Says:

    Don’t understand low inventory on German cars, they have nothing to do with Japanese production interruptions, could this be a case of low supply, higher prices? Kit don’t tell me you’re giving up on your Prius already, I thought you loved it???

  13. Chuck Grenci Says:

    I’m guessing the new BMW V-6 needs to fit in a smaller sized vehicle; I-6′s, even though fairly narrow, are as long as a V-8. But everyone is right, in that, the I-6′s are more naturally balanced (smooth) without needing balance shafts, etc.

  14. HtG Says:

    The turbine like sound of those I6 BMW engines from the eighties. Sehr, sehr schon.

  15. Kit Gerhart Says:

    Pedro, #12,
    I’m not giving up on my Prius, and yes, I love it, or at least it serves my purposes very well.

    I just like looking at cars and, mainly, wanted to see what the Chatanooga Passat and cheapened Jetta looked like. I also got to see a new New Beetle. The beetle had a manufacturer plate and was driven there by a company rep. It looked a lot different from the old New Beetle, but I didn’t especially like it.

  16. pedro fernandez Says:

    According to TTAC. Nissan will sell Leaf owners in Japan a quickie charge station that costs about half of the price of the car itself. Now that makes a lot of sense!!!!

  17. dcars Says:

    I liked the Jag S-type styling it was a salute to the older Jag’s. The new ones are nicely styled and well what ever. Lots of Luxury cars on the market these days.

  18. W L Simpson Says:

    unions have always performed 2 primary “services”, driving inflation ever upward & protecting deadbeats.
    They gave themselves bigger raises than they “earned” for the members.

  19. Will Says:

    That BMW patent application appears to be an orphan (assuming, based on my limited German that this is it):

    http://worldwide.espacenet.com/publicationDetails/biblio?DB=EPODOC&II=0&adjacent=true&locale=en_EP&FT=D&date=20100506&CC=DE&NR=102008055896A1&KC=A1

    http://worldwide.espacenet.com/publicationDetails/originalDocument?CC=DE&NR=102008055896A1&KC=A1&FT=D&date=20100506&DB=EPODOC&locale=en_EP

    It was filed in 2008 in Gernamny and they do not appear to have pursued it elsewhere.

  20. Kit Gerhart Says:

    “Don’t understand low inventory on German cars,”

    The dealer I visited had what seemed like a high inventory on some models, like C300 4Motion. They had about 8 of them, all over $40K, both 2011 and 2012. That seems like a quite a few for a smallish dealer.

  21. cwolf Says:

    The ZL1 will be a great niche car to see on the road;just as Shelby’s and Boss302′s will be. But for the price the Ford GT and Camero V8 seems the most logical choice for those who enjoy being “molded into the seat” takeoffs.

    I agree with Rod’s reasoning,but let me,with a fair degree of uncertainty due to the existing gag order,offer you my slant. There ARE existing differences between the UAW and GM concerning a higher wage for new 3 tier workers and with profit sharing. Chry has been more difficult to deal with,so I hear. Ford negotiations are not going all that well. I believe the demand for lower wages and/or a lump sum compensation package is the reason. As a result, there are a couple of UAW locals authorizing a strike vote. But here is the ACE in the hole. A strike may not take place with either of the BIG3,but that does’nt mean there can’t be a “slow down”,in which case may not hinder transplant unionization efforts. Furthermore, suppliers,who tend to be squeezed the most,are most discontent. I can say with some probability that many union locals have or will support a strike vote. I conlcude the UAW National Committee may rely on those union suppliers to do their bidding! Ain’t over till it’s over,so enjoy the show!

  22. cwolf Says:

    @ W L Simpson Re #18: How Stupid! And your proof is?

  23. Dan Says:

    I think Rod’s analysis on a UAW strike was very insightful. I think in the final analysis, if the UAW can convince the foreign automakers that their pay would increase, it would have to be substantial to compensate for the union dues that would be deducted. Somehow, this increase would have to be passed on to the consumer.

  24. Will Says:

    That BMW V-6 patent application appears to be an orphan. It was filed in 2008 and was not pursued outside Germany and the time for doing so has long expired.

  25. Brent Burrows Says:

    That Camaro ZL1 looks amazing!!!! Since it had the LSA engine I was expecting around 550 ponies, right around where the CTS-V is at, but 580 ponies that will send any Mustang crying back to Dearborn. What did they do to get that extra power? I was considering buying one when they come out next year now I want one even more. Keep us posted.