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Episode 37 – Senate Wants Oversight, New EU CO2 Agreement, Nissan NV 2500 Concept

December 5th, 2008 at 12:00pm

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The Big Three face roadblocks before getting a bailout because Congress wants to see more concessions. Europe reaches a CO2 compromise requiring automakers to meet emission targets by 2015. Nissan unveils a new multi-functional commercial van concept for North America. All that and more, plus a look at the new Renault Mégane.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. The Big Three face roadblocks before getting a bailout. Europe reaches a CO2 compromise. And Nissan unveils a new commercial van.

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

This is Autoline Daily for Friday, December 5, 2008. And now, the news.

The Big Three and the UAW put in a pretty good performance in front of the Senate Banking Committee yesterday, but they still face major hurdles. Senators want a trustee or oversight board to keep an eye on where all the money is going. Dr. Mark Zandi from Moody’s said the Big Three really need somewhere between $75 and $125 billion, not $34 billion. It’s clear the Senators want to see more concessions from lenders, suppliers, dealers and the UAW. It wants the union to get half of its VEBA funds in stock, not cash. It wants the union to give up SUB benefits, or supplemental unemployment benefits, and cut its wages to exactly match the transplants.

So, how did the CEOs do? Let’s rate their performance. I’d give an ‘A’ to Chrysler CEO Bob Nardelli. He was the first to answer most the questions and was very forthcoming. Alan Mulally from Ford, came across as timid, like he was being overly cautious not to make another gaffe. Rick Wagoner from GM looked nervous, he blinked his eyes a lot and stammered in his answers. Ron Gettelfinger looked extremely uncomfortable. He came across as someone who did not like talking to these Senators. But overall, all of their testimony came across as serious and forthright and much better than two weeks ago.

CSM Worldwide released a report showing all automakers in the US have a high level of overlap in the suppliers they use. Asian automakers use 60 percent of the same suppliers that the Big Three do, German automakers use roughly 45 percent. The overlap includes everything from air bags to camshafts to engine computers. CSM says if one of the Big Three went bankrupt, it would pull most suppliers down with them.

In a stunning announcement, Honda said it’s pulling out of Formula 1. Stunning because Honda never quits. The company says this will help it focus on its core business in the face of tough economic times. I’d say another reason is that Honda’s F1 team has not been competitive.

The European Parliament and the 27 EU nations have a tentative agreement on CO2 emissions. Wardsauto.com says automakers must meet an average of 120 g/km (subscription required) with 65 percent of their new vehicles in 2012 and 100 percent by 2015. But….companies won’t face fines until 2019 if they miss the targets.

For the first time ever, Nissan is getting into the commercial van segment in North America with the NV 2500 Concept. It’s designed to be flexible and multi-functional with features like a computer workstation, numerous storage compartments, tool racks and nearly six feet of height. Nissan said it’s developing three other commercial vans for North America and it’s going to build them in Mississippi starting in 2010.

Coming up in our feature story we’ll take a look at the new Renault Mégane, right after this.

Renault just redesigned its best-selling car, the Mégane. This c-segment car has fresh styling, a new interior and upgraded powertrains. It’s even helping the company polish its eco-friendly image.

The 2009 Mégane offers engines from an economical 80 horsepower diesel up to a 225 horsepower turbocharged sport model.

Renault is also continuing its push for more environmentally-friendly vehicles. Some versions of the new car even earn the company’s eco2 certification, which means it has to either run on biofuels or emit fewer than 140 grams of CO2 per kilometer. It also has to be built in a certified energy-efficient plant, contain at least five percent recycled plastic and be at least 95 percent recyclable at the end of its life.

Just like before, the new Mégane is available in a variety of body styles ranging from a four door sedan to a convertible. But it doesn’t matter which one you choose, they all have a highly-styled design with swooping lines and contours.

If you live in one of the countries where Renault sells cars, the new Mégane should be on dealer lots right now. Look for it to start around 19,000 €, or about $24,000.

Well, it’s the moment you’ve all been waiting for. If you signed up for our daily e-mail newsletter in the last week you were automatically entered for a chance to win an awesome prize. This week we’re giving away a limited-edition model of the 2010 Ford Mustang. This 1:18 scale replica is one of only 4,000 made, and its part of the Ford Collection.

As always, my crack team has chosen the winner at random from our list of new subscribers. Pookie, the envelope please! And this week’s winner is . . . Joseph Alfonso! Congratulations Joseph Alfonso.

Remember, if you haven’t signed up for our e-mail newsletter yet, it’s not too late! In fact, our recent giveaways have been so popular we’re opening it up to every newsletter subscriber. Every Friday you’ll find a new trivia question in our Autoline e-mail. Answer it correctly and you’ll be entered for a chance to win some great prizes.

Anyway, that’s it for today’s show. Thanks for watching, we’ll see you next week.

10 Comments to “Episode 37 – Senate Wants Oversight, New EU CO2 Agreement, Nissan NV 2500 Concept”

  1. Tony Gray Says:

    John, I think the race car you showed when you talked about Honda leaving Formula 1 was in fact an Indy Car.

    But I may be wrong. Just ask my wife.

  2. Andy Harris Says:

    John, Tony is correct. You were showing a stock photo of the Honda Indy Car, not F1.

  3. John McElroy Says:

    To Tony Gray:

    You’re right, we goofed. That’s an Indy car, not F1.

  4. Alex Kajdi Says:

    John,

    I must say that I look forward each day to see your “Autoline Daily” email appear in my mail box, Great Show. It feeds my need for information on the Auto Industry.

    I watched the Detroit 3′s (GM, Ford & Chrysler)
    performance before the Senate Banking Committee yesterday. The words “Bankruptcy” and “Oversight” were used several times. I believe Ford is leading this race. Ford’s current cash positon is the best of the three. However, Senators applauded Ford for coming to Washington in and effort not to be left out of any possible bailout cash. I think that is why the CEO of Ford became some what timid.

    Cerberus is the reason GM & Chrysler are sitting at the bailout table. The financing strangle hold Cerberus has over both of them
    is inexcusible! Cerberus/GMAC requiring credit scores of over 700 of GM Customers is wrong.
    A car loan is a secured asset. If a manufacturer can not even provide financing for their product how in the world will they ever be able to liquidate inventories and retool.

    GM indicated that they were going to keep only four brands, Cadillac, Chevrolet, Buick & GMC Truck. I understand Cadillac as the luxury brand, Chevrolet for the Russian market, Buick for China and GMC Truck as a Worldwide Truck Divison. However, I disagree with maintaining any of this brands except GMC in North America. General Motors needs to reorganize into a leaner “New General Motors Corporation”. All brands sold under one roof until all inventories are exhausted. This is the game plan Ford is attempting to do with Ford, Mercury and Lincoln. GM could begin with the 2010 Chevy Volt and call it the 2010 GM Volt. All General Motors cloned vehicles would be stratified or classied either GM 100 = Chevy Aveo, GM 200 = Chevy Cobalt & Pontiac G5, GM 300 = Chevy Malibu – Pontiac G6 & Saturn Aura, and so on. This would pair down the models and create a single brand called “GM” – “The New General Motors Corporation”.

    I think this type of restructuring of General Motors is what the Congress and The Senate would be very willing to support. Bob Lutz should be sitting right next to Rick Wagoner telling The Congree and Senate about GM’s vision for the electrification of the automobile. The need to improve the national electrical infra structure of the US. What new techologies, skills and new jobs would be created to make the US less dependent on foreign oil.

    I hope when the “Volt” is available for sale or lease it is called the “The(New)GM Volt” or “GM EV2″ for “Second Generation Electrical Vehicle”.

  5. Stan Doane Says:

    John,

    You said last year that oil would be $25 a barrel in the future. I thought you were nuts but it looks like you are going to be right! How did you know?

  6. Bill Schultz Says:

    “The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.” – Ronald Reagen (1911-2004)

  7. Dave Kopitzke Says:

    John,

    I don’t think that GM can be saved with nomenclature and semantics (GM/GMC). The failure of the US auto industry is largely GM’s failure. They lost more market share to foreign competition than Ford or Chrysler ever had. But, identifying the blame does nothing to address the current problem. The temporary solution is to extend a line of credit to all three companies. The permanent solution rests with the companies aggressive plans to become competitive. I see a strong parallel between our government’s lack of support of our industry and Japan’s and Germany’s active support of their industries since the end of World War II. I understand the political differences, but there is no excuse for the lack of understanding of the automotive industry on the part of our representatives. Senator Shelby cannot understand why are companies are asking for assistance but he had no trouble understanding Daimler’s and Hyundai’s requests.

  8. Lenny Says:

    I think everybody,s nuts. GM was a great company before and will be again.. All they really need is a great leader. Someone who has a brain, You can,t turn all their cars into one name .who would buy shoddy junk..I think they need money to start given loans to buyers at a fair rate of return. longer warrantys and less models for each brand. Cut there union deal for now till better times. Cut all upper managers pay to. and no bonuses to return to profit. I would hope stop changing names of car names,but build on the name instead…

  9. Tim Reynolds Says:

    Nice post. Thank you for the info. Keep it up.

  10. John McElroy Says:

    To Stan Doane:

    Actually two and a half years ago I said oil would hit $30 a barrel again. I based that on the fact that rampant speculation had driven prices way above a sustainable market cost. Also, every sharp run-up in oil prices (1975, 1980, 1991) has been followed by a global recession followed by a collapse in oil prices.