Episode 854 – Fisker Looks for Private Funds, The Great Escape, Dodge Rallies Around the Dart
March 26th, 2012 at 11:49am
Runtime: 7:54
Fisker Automotive is trying to raise $100 million through private equity after the U.S. government refused to loan more funds to the company. Ford is producing an hour-long reality series called “Escape Routes” featuring the 2013 Escape that will air on NBC. Dodge announced it will enter the Global RallyCross Championship Series with a rally version of the Dart. All that and more, plus another entertaining installment of Hall versus Hall.
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This is Autoline Daily for March 26. I’m John McElroy and we have a lot to show you today, including another installment of Hall versus Hall. But first, the news.
MAMMA MIA! WE NEED MORE MONEY!
Fisker Automotive is scrambling to find more money. Last month, the U.S. Department of Energy refused to release more funds to the company as part of a previously agreed upon loan. So now, Bloomberg reports, Fisker is trying to raise $100 million through private equity. That could prove harder than it would have just a few months ago. The fledgling start-up is running into a number of problems, including an embarrassing story that hit the headlines when one of its cars broke down while undergoing tests by Consumer Reports. Recently, a number of electric car start-up companies have folded up as government money dried up. So let this be a lesson for anyone else trying to break into the automotive business: if your business plan is predicated upon getting government subsidies, then you really don’t have much of a business plan.
PSA STOPS SPENDING
Now that General Motors is buying part of Peugeot, the French automaker is slamming on the brakes when it comes to spending money. It stopped development of a dual clutch transmission and at least four new vehicle platforms, the Wall Street Journal reports. PSA wants to see how it can get GM to split the costs. The two companies are looking for $2 billion in combined annual savings. But GM better hope that PSA can quickly get its financial house back in order because the last thing it needs as it struggles to turn its European operations around is a partner that can’t turn a profit.
OOH-LA-LA, ARE THOSE APPS EXPENSIVE (subscription required)
Meanwhile, Ward’s reports that Peugeot is banking heavily on its new B-class car, the 208, to run up the sales charts. But the B-class segment in Europe is facing a ferocious pricing war as most automakers are not making any money on those cars. Peugeot says if the 208 hits its sales targets, three of its assembly plants will be back in the black. One of their key selling points will be with a touch screen that displays apps, like one for finding a nearby restaurant. Get this: the cost of getting those apps is “only” $460 for the first year, and “only” $200 a year after that. Please, don’t any of you out there tell Peugeot that you can get apps for free on your smart phone. I think it would ruin their day.
THE GREAT ESCAPE
Ford is out in front of most automakers with its social media efforts. And it has integrated its products into TV shows like American Idol. But with its most recent effort the company is producing an hour-long reality series called “Escape Routes” featuring the 2013 Escape. Six episodes of the show will air on NBC starting this Saturday. Like any other “reality” show, teams will have to complete a series of challenges for a chance to win $100,000 and two new Escapes. Ford won’t say how much it spent on this but its way more expensive than a traditional ad campaign. Even so, Ford’s top marketer, Jim Farley is a true believer in audience engagement, and that’s what this is all about.
DODGE RALLIES AROUND THE DART
Dodge announced it will enter the Global RallyCross Championship Series with a rally version of the Dart and driven by four-time Rally America champion Travis Pastrana. The car is powered by a purpose built 2.0 liter, turbocharged four-cylinder that cranks out 600 horsepower and 550 lb.-ft. of torque. If you ask me, this is a very smart way for Dodge to reach out to a new generation of buyers.
Coming up next, it’s time for another installment of Hall versus Hall.
HALL VS. HALL
Jim and Bob Hall are two of our favorite people in the auto industry. Jim is with 2953 analytics and Bob is an auto designer. Every now and then we like to pose a question to them and here is the one we asked them in the most recent installment.
(Today’s episode of Hall vs. Hall is only available in the video version of today’s program.)
Boy do I enjoy the Jim and Bob show. And don’t worry, we’ll have more Hall versus Hall in future shows.
But that wraps up this show, thanks for watching, we’ll see you tomorrow.
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Comments (42)
March 26th, 2012 at 12:06 pm
@ Johnny Mac
re; Your comment on Business Start Ups and Government Subsidies ;
( to paraphrase ; ‘ Any business start up needing government funding does’t have much of a business plan ‘ )
+ 1 …. x 10000000000000000000000000000
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An E/V snapshot nobody wants you to see
http://bangshift.com/blog/caption-this-photo-a-perfect-summation-of-the-electric-car-scene.html
March 26th, 2012 at 12:11 pm
So with the world crying poverty someone actually thinks that relying on government money is a good idea? I have a bridge to sell that person.. And an island… And a plane…
March 26th, 2012 at 12:13 pm
Here’s a link to a press release from Siemens describing their way of computerizing car systems so that they can be updated and also connected to the grid. Autonomy here we come!
http://www.siemens.com/innovation/en/news/2012/e_inno_1207_1.htm
March 26th, 2012 at 12:17 pm
And here’s a story about an analyst raising his rating on Tesla after walking around the Fremont factory. It seems Tesla has the molds ready for making its S car, and the analyst expects the company to be able to make 5000 cars a quarter.
http://blogs.barrons.com/techtraderdaily/2012/03/26/tesla-rising-wunderlich-says-production-capacity-looks-good/
(come on Craigie, let’s put that new HP Pavilion to good use)
March 26th, 2012 at 12:21 pm
PSA
I think GM needs to start worrying a whole lot less about PSA’s ‘ Spending ‘ and start focusing everything on stemming PSA’s massive’ Bleeding ‘ of late
Oh …… but wait . GM’s now making all their decisions by playing with LEGOS ( TTAC )
Hmmmn . LEGOnomics . I wonder if thats anything like Obamanomics ? I’ll bet it is
March 26th, 2012 at 12:22 pm
You can just hear the top brass at Fisker saying, “Dang, if only this happened after we’d grown the company. At least then we’d be too big to suffer problems without Government handouts.” I hate it when that happens!
March 26th, 2012 at 12:30 pm
According to ELI – “The federal government provided substantially larger subsidies to fossil fuels than to renewables. Subsidies to fossil fuels—a mature, developed industry that has enjoyed government support for many years—totaled approximately $72 billion over the study period, representing a direct cost to taxpayers.” Maybe we should ask why we have not insisted that they move forward with vapor recovery and phase 4 fuel.
March 26th, 2012 at 12:31 pm
# 4
TESLA
Hmmn . Lesssee here
Haven’t sold a grand total of 5000 cars to date
Spent all the $1.25 billion the government gave them and are now begging for more ( plus the Billions more we gave them for their Toy Space Ship )
Have yet to have a TESLA Roadster complete any road test without a minimum of five repairs and in most cases needing up to four different cars to survive the complete test
Was one of the first to begin the whole Car-BQ trend
Was recently revealed to have a ‘ Bricking ‘ problem
Has been condemned by 90% of Silicon Valley engineers for their poor engineering as well as Quality Control
Are at least three years late on their promised ‘ Reasonably Priced E/V ” which has still yet to surface .. even as a prototype
The TESLA ‘ S ‘ has yet to be proven a runner
Hmmn .
So tell me HtG
What is Mr Wunderlich on these days ?
What ever it is I want some of that !
Errrrr……….. No I do not
March 26th, 2012 at 12:35 pm
I thought you’d get a kick out of that link, tj.
BWTM! WSJ reports($) that A123 will have to spend 55 million dollars correcting a fault in their battery packs. Here’s the inflammable quote from the piece, ‘”As a result of engineering analysis and testing, we believe this is not a safety issue, and we have determined the root cause and have taken corrective actions,” said David Vieau, chief executive officer, in the statement.’
http://online.wsj.com/article/SB10001424052702303816504577305440678947180.html?mod=WSJ_auto_IndustryCollection
March 26th, 2012 at 12:59 pm
Next Hall vs Hall (my question); what current fuel do you favor and why? While I enjoyed the hypothesis of theories, there was little to be gleaned from the discussion (other than future potential(s) from what might/could be).
March 26th, 2012 at 1:03 pm
The Hall vs Hall segment was very informative.
March 26th, 2012 at 1:42 pm
#10 dcars
Agree, theoretically.
But it did lack insight to what is out there today. (my point in #9)
March 26th, 2012 at 1:45 pm
So what would be the best fuel for near future? Ethanol!. We have all heard of cellulosic ethanol made from wood or grasses, but it can also be made from garbage. What does every city in America have? Per capita we probably generate more garbage than anyone else in the world. Think of all the American jobs that would be created, the reduction of money leaving the country to pay for oil, National Security (energy independence), and reducing our carbon footprint. Brazil has already proved that you can run the fleet on Ethanol.
March 26th, 2012 at 2:00 pm
Garage produces methane, which is a hydrocarbon, but would be better utilized as a fuel (as opposed to just being released into the atmosphere. Ethanol (cellulosic) could be part of the answer (though a lot of infrastructure would still need to be addressed). A lot of solutions out there, and that’s part of the problem,can’t attack from one direction; needs a multiple approach solution (which are currently under experimentation).
March 26th, 2012 at 2:04 pm
Another nail in the Fisker/EV coffin ;
http://www.thetruthaboutcars.com/2012/03/a123-systems-recalling-battery-packs-used-in-fisker-karma-other-cars/
( in addition to HtG’s #8 )
———–
ETHANOL
Hmmn . Houston we have a problem here . The problem being if we were to dedicate as much Farmland as it would take to produce enough Ethanol to supply even 30% of the nations fuel needs ….. Food prices would jump some 15- 45%
Also less than 30% of Brazil’s population own/drive cars as well as Brazil has been Clearcutting acres of Jungle and Forest in order to increase Farmland just to me their current demand
So not a great analogy . Not even a positive one when you think about it .
BEST FUEL Alternative ?
Drive less
——
My ‘ Early Adapters ‘ essay . After Johns fantastic statement about start up businesses and government subsidies I think I’ll let that one sink in for y’all and do my essay later in the week
March 26th, 2012 at 2:07 pm
As for Fisker, it didn’t take a rocket scientist to figure out it was doom to fail from the start. The yoyo’s in DC should never have given them a penny. How can a startup company think they can compete with the big boys? It takes many years of experience and know how and this does not come overnight. What a waste of our dollars!
March 26th, 2012 at 2:14 pm
Regarding the best fuel (for today), I used to think it might be diesel, but it looks more and more like gasoline is the best fuel for the near- to mid-term. Even the best of the diesel cars for fuel economy in the U.S. market, the VW’s, don’t get that much better than the best of the conventional gas cars. Then, there are the hybrids. The Camry hybrid beats the Passat TDI in CR’s “overall” rating, though the Passat really stands out in highway driving with 51 mpg in CR’s 65 mph steady speed, at 51 mpg.
Moving to fancier cars, the E350 with the new, direct injection gas engine is very close to the E350 Bluetec diesel, at least in EPA ratings. CR hasn’t tested a 2012 E350, though, so I don’t know what they would get.
March 26th, 2012 at 2:20 pm
Speaking of failed start-up car companies, the local Lincoln/Jaguar/Land Rover store has a Delorean on display in the showroom, with the original window sticker. The sticker price was about $30K. I didn’t realize they were that expensive. That would have been a pricey car in 1982.
March 26th, 2012 at 2:50 pm
I wonder if Delorean had built his car today he would have gone hybrid or electric as well as the other “pioneers” of today! Looks like Motorweek’s rosy review of the Karma is too late and too little to save that 100k Titanic of a car.
March 26th, 2012 at 3:19 pm
Delorean went pretty “mainstream” with the power train in his car. The engine was a V6 used by Volvo, Peugeot, and Renault. As I remember, the engine was also used in the Renault-based Eagle Somethingorother.
I don’t know what transmissions Delorean used, but I suspect they were a mildly modified existing units, maybe transaxles used in front drive cars.
March 26th, 2012 at 4:07 pm
DeLorean
Why it failed ( miserably )
#1 The car was not competitive in its price class in the slightest
#2 The technology ( handling acceleration etc ) was abysmal
#3 The quality was even worse ( Google Johnny Carson’s reactions to his DeLorean upon delivery as well as why he dumped it ASAP )
#4 The tranny and drivetrain , though straight out of the Renault Alpine GTA which was a pretty fine little Exotic were a mess once John worked his magic on them
#5 The car was all show and no go ( mechanically ) Blinding you with bling while delivering nothing ( including running most of the time )
#6 Mr DeLorean had a bit of a nose candy problem
#7 As well as being more than a bit of a Grifter when left to his own devices
#8 And yes ……. just like the TESLA’s Brights and Fisker’s of today . JZDL was being subsidized by government monies ( Ireland ) Govt Subsidies + Start Up Business = Destined to Failure
Sad thing is a few that still own DeLoreans and have addressed the multiple ills it came with as well as upgrading much of the car have shown that if JZDL would of put the money into the cars development and production instead of those 4 season Blizzards he was into , it would of been pretty competitive and a darn fine ride
Hmmmmn . Kind of like ……. the Pontiac Fiero / Solstice /Saturn Sky !
Gee . Wonder where JZDL could of learned that habit from ?
His time at GM maybe ?
Ya think ?
March 26th, 2012 at 4:24 pm
The Delorean doesn’t look so great in kitchen sink stainless, especially if you touch it, leaving finger prints. I remember them being some sort or gambling prize in Las Vegas when they were new, and most of the cars on display were painted red or white. The car at the dealer near me is not painted.
March 26th, 2012 at 4:35 pm
What seems to be missing in all this bashing of Tesla, Fisker, or Delorean, is that NO new car company has started and survived in the last half century, except may a couple small operations making million dollar exotics. There’s not much chance of anyone starting a real car company. That’s why it was probably ill-advised for investors, whether private, or the Irish or U.S. goverments to put money in startups.
March 26th, 2012 at 4:40 pm
Have any new parts suppliers emerged and thrived in the same time, Kit? It seems to my unschooled eye that some computer hardware and software people are making a go of it.
March 26th, 2012 at 4:56 pm
#7
Good information Steve!
So what do you think of that Mr. tj Martinj? $72 Billion in subsidies to the FOSSIL Fuel companies???? Like BP, who dumped a whole lot of oil in the gulf, had no problem paying a $12 Billion fine and then paid HUGE bonuses to ALL Employees? Don’t hear you complaining about the government spending your tax dollars on GAS…
March 26th, 2012 at 5:02 pm
I don’t know of any major parts suppliers that have started recently, except operations spun off, or sold off by larger companies. There may be some, though. Magna may be the newest major parts supplier, having started in the 50′s.
March 26th, 2012 at 5:10 pm
The Truth about the VOLT
http://www.thetruthaboutcars.com/2012/03/the-volt-saves-a-crapload-of-money-gm-is-shitting-you/#more-436563
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#24 Yeah …. like most all of them ! Partly because computers require less massive machinery to manufacture . Partly because the people who did make it ( I’m thinking Apple ) were created by Mad Scientist Creative geniuses with the intelligence to bring in quality engineering , financial etc staff to make their dreams come true and……..
A whole lot because they didn’t come out of the Box trying to be the Big Dog on the block before they’d even successfully manufactured and marketed their product on a Small Scale … then growing as the market and their Vision would allow
Fisker TESLA et al jumped the gun with their hype and hyperbole making claims they could never back up at the time of making them ….. then lie each and every time something goes amiss ( or better yet like Musk try to sue their critics )
Ugh . I could go on for days about the blatant errors of Fisker TESLA etc .
Suffice it to say both companies ( as well as Bight ) are being led by individuals with Zero manufacturing , Zero Marketing , less than Zero Engineering as well as 30 below Zero Financial and Business sense , all while thinking they know everything ( watch an Elon or Henrik interview )
Fact is … somebody COULD make it today . If they’d do it right as well as not be on the Government Handouts list ….. Not having that Safety Net tends to motivate one to move ahead with a bit more consideration than any of the Government Start Ups of late with their Government Financial cushion .
March 26th, 2012 at 5:13 pm
PSA’s halt in spending amounts to nothing more than awaiting a much needed cash cow(GM). I expect the courtship to be nothing more than a mutual affair and a potential thorn in the side to the Opel union. As strong as the German unions are,I believe GM will close at least two plants after the contract end reguardless.
I think tj made a point about the unions are not the fault for the troubles GM self created and used the unionized success of MB as an example. However,one must realize Opel and union are sinking in the same boat. The union may be the same,yet the manufacturers are in different situations:one is profitable, the other is not! If Opel is to exist,besides a total restructure,the union will prolly have to take a small pay hit and give up some vacation and holiday time off. Don’t think GM will bend much,if at all,to union pressures after the contract expires. And I am becoming more certain the union will give in.
March 26th, 2012 at 5:16 pm
@ T Bejima
What do I think ?
I know that those Fossil Fuel subsidies are whats keeping the cost of goods , food , materials etc lower ….
FOR EVERYONE !
Not just a select few !
Chew on that thought for a bit while considering the impact a $15 gallon of milk and $25 for a dozen eggs would have on yours and everyone else’s lives
Didn’t consider that when asking now did you !
March 26th, 2012 at 5:26 pm
A little Retail insider information
( in addition to my #29 )
Cost of Transportation can equal up to 35% of the final retail price of any given product .
Including distributor to store , raw materials to factory , factory to distributor etc etc etc
The fact is on some goods transportation costs can equal in excess of 45% of the final retail price
March 26th, 2012 at 5:49 pm
tj,I won’t dispute your stated data,but I think you are too absorbed or influenced by what you choose to read. Considering the huge profits of the oil industries,do you honestly believe for one second the subsidies they get are going to reduce fuel costs any further? Dream On!!!
Once the oil is out of the ground it becomes influenced by the demands of the global market and your and my tax dollars do absolutely nothing to influence US fuel prices as long as China’s dollars sing a sweeter tune! $15 dollar milk due to added fuel transport costs! Let’s not over exagerate.
March 26th, 2012 at 8:19 pm
TTAC has a chart showing the US is number 6 in the % of gas going up in the past year with Italy being #1 and France actually dropping. I guess we’re now beginning to resemble the rest of the world but with a lot more driving.
March 26th, 2012 at 8:27 pm
#29,
Milk wouldn’t cost $15/gallon due to transpotation costs, even if gas or diesel cost $50/gallon. Where are you getting this BS?
March 26th, 2012 at 9:17 pm
“#24 Yeah …. like most all of them”
Name a few of these “new” parts suppliers who make things like radiators, windows, generators, or any other parts basic to making cars.
March 26th, 2012 at 9:22 pm
#34,
I meant #27,
Please name some of these “new” suppliers who are making basic parts for cars.
March 27th, 2012 at 8:46 am
The Truth about the Bailouts…
Where you’re money really went (hint: not very much went to GM and Chrysler when you look at the big picture)
http://projects.propublica.org/bailout/list/simple
March 27th, 2012 at 9:07 am
oh puhleeeeze, TB. 700B is only a fraction of the supports which govt and central banks have been fanning around. They just gave a Trillion loan to European banks a few days ago.
The point is that the auto bailouts were on the TV, and doofbags, egged on by interested parties and demogogues, think they understand it. No reason can budge their stone cold minds. Of course it’s a treat listening to reasonable minded conservatives like Lutzbo sing in the chorus of govt good graces.
March 27th, 2012 at 9:23 am
TOYOTA WISES UP !
( when it comes to E/V’s and Hybrids that is )
http://www.thetruthaboutcars.com/2012/03/toyotabmw-partnership-diesel-engines-earlier-batteries-later/#more-436627
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@ HtG – Thanks for saving me the effort ( # 37 )
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@ T. Bejima – Now what did I tell you about not jumping on the corporate bandwagon when outside the job ?
I mean really . You DO know better than that ( #36 ) Really . I know for a fact you do . And regardless . Even if those numbers were correct my point is still made . Bailouts for a specific few , in what should be the private sector and monies we can ill afford to lose …… which we have ( to the tune of .. again $23.77 billion of which more than half is GM’s doing )
—–
@ Kit
re; #35
What part of my # 27 did you NOT understand was about COMPUTER manufactures , not parts suppliers ?
March 27th, 2012 at 9:51 am
#38,
We’ll probably never see any of those BMW diesels in Toyotas, but the deal will be very good for Toyota in Europe. They ought to put one of those diesels in a Prius body, though, both with, and without the hybrid power train. Talk about fantastic mpg.
March 27th, 2012 at 11:05 am
Now if Toyota could learn a bit about handling and BMW about better build quality, then the partnership will make sense.
March 27th, 2012 at 3:17 pm
I never thought I’d see a BMW diesel in a Lincoln…
March 27th, 2012 at 11:00 pm
John – Please read the following from the Ford Motor Company website. Looks like EcoBoost® is going to help Ford compete for the Poiice car business, giving Ford better fuel economy and acceleration. GM had better look out:
DEARBORN, Mich., March 16, 2012 – With experts predicting fuel prices are headed for record highs this year, the fuel efficiency of the new Ford Police Interceptors has the potential to help America’s cash-strapped cities reduce their fuel bills.
Ford engineers tuned the all-new Police Interceptor sedan and utility vehicle models to save fuel even when they are standing still, with no sacrifice to pursuit performance.
The city and highway fuel economy ratings for the new Police Interceptors have increased by an impressive 25 percent over the retired Crown Victoria. But many law enforcement vehicles spend the majority of their lives idling, and that is where the new models can provide even more fuel savings.
“Our latest fuel-efficient V6 engines deliver on our promise for increased performance and improved economy, while providing government agencies with a money-saving solution,” said Bill Gubing, chief engineer of the Ford Police Program.
Top fuel economy and performance
The Police Interceptor sedan and utility vehicle that are now being delivered to law enforcement agencies are available with efficient powertrain packages that provide more performance and better fuel economy, and are paired with standard and exclusive all-wheel drive for optimized traction and control.
•The base 3.5-liter V6 in the Police Interceptor sedan delivers 288 horsepower and EPA-certified fuel economy of 18 mpg city, 26 mpg highway. Compared to the Crown Victoria – America’s top-selling law enforcement vehicle for the past 15 years – the Police Interceptor sedan offers an improvement of 4 mpg city and 5 mpg highway, and 38 more horsepower
•The optional EcoBoost® 3.5-liter V6 in the all-wheel-drive Police Interceptor sedan is rated at 365 horsepower and is EPA-certified at 16 mpg city, 23 mpg highway. In recent Los Angeles Sheriff’s Department testing, the EcoBoost Police Interceptor beat all competitive police cars from General Motors and Chrysler in 0-60 mph acceleration tests
•The Police Interceptor utility is built with a 3.7-liter V6 rated at 304 horsepower. The EPA rating of 16 mpg city, 22 mpg highway is best in class, topping the Chevrolet Tahoe PPV. The Police Interceptor utility easily out-accelerated the V8-powered Tahoe in the LASD tests, reaching 60 mph in 8.4 seconds compared with 9.5 seconds for the Tahoe.