AD #1320 – VW Makes A Lot of Money, Ford Dumps Microsoft, Time to Get Off OPEC Oil

February 24th, 2014 at 11:46am

Runtime: 7:12

- VW Makes A Lot of Money
- Daimler & VW Management Changes
- UAW Wants Another Vote
- Ford Dumps Microsoft
- Ford’s Refreshed Focus
- Hyundai Shows Off New Concept
- Let’s Get Off OPEC Oil

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Hello and welcome to a brand new week of Autoline Daily. Later on in the show I’ll tell you why the U.S. should set a goal of getting off OPEC oil, but now let’s get to the news.

VW MAKES A LOT OF MONEY
It’s one thing to look at all the different cars that are coming out and tracking how well they’re selling. But all these car companies are in business to do one thing: make money. And that’s why we like giving you a simple snapshot of how these companies are performing on the bottom line. I say all that because we just got Volkswagen’s full year earnings for last year. The company sold 9.728 million new cars and commercial vehicles, which puts it just a smidgen ahead of General Motors. It’s revenue grew slightly to $260 billion, which puts it well ahead of Toyota. If VW was a country, it would have the 38th largest economy in the world. VW posted an operating profit of $15.4 billion and a net profit of nearly $13 billion. You can ignore that 58% drop on the bottom line. The year before VW’s profit was wildly inflated on a one-time basis as part of its integration of Porsche.

VW AG 2013 EARNINGS
Sales: 9.728 M +4.1%
Revenue: $260 B +2.2%
Operating Profit: $15.4 B +1.5%
Net Operating: $12.8 B -58.2%

MUSICAL STUHLS
Want to know how to get a job as a top executive in a German car company? Start your career at a different German car company. Volkswagen quickly snatched up Andreas Renschler after he abruptly quit Daimler last month. He’s now running Volkswagen’s commercial truck division, the same job that he had held at Daimler. Meanwhile, Daimler just named Bernd Pischetsrieder to its supervisory board. He also served stints as the CEO of BMW and later as the CEO of VW. In the past, you never saw top execs jumping from one car company to another, especially not in Europe.

UAW WANTS ANOTHER VOTE
Well we didn’t expect this story to go away anytime soon. After losing out on organizing Volkswagen’s plant in Chattanooga, Tennessee, the UAW has filed an appeal with the National Labor Relations Board over interference by politicians and outside special interest groups during the vote from earlier this month. The union cited statements from Republicans in the state legislature threatening to end incentives for VW if the union was accepted. Republican Senator Bob Corker claimed VW wouldn’t build a new vehicle in Tennessee if workers joined the UAW. The NLRB will determine whether or not these are reasons enough to hold a new election. With the 5-member NLRB board comprised of three Democrats and two Republicans, I think the UAW has a good chance of getting a second shot at this.

FORD DUMPS MICROSOFT
First Microsoft passed on Ford’s Alan Mulally as its next CEO, now the Dearborn automaker is dumping Microsoft. Sometime this year or next year, the company plans to switch to Blackberry’s QNX operating system for SYNC instead of Microsoft. The change isn’t too unexpected because Ford has been hurt in recent quality surveys due to software problems with SYNC.

FORD’S REFRESHED FOCUS
Ford just showed off its refreshed version of the Focus. It gets a few minor changes to the front and rear fascias. New for the U.S. is Ford’s 1.0L 3-cylinder EcoBoost engine, which will be mated to a 6-speed manual. The car also gets an upgraded chassis and suspension for a more connected feel to the road. And the interior has been refreshed as well. It goes on sale in the second half of this year.

HYUNDAI SHOWS OFF NEW CONCEPT
Hyundai will unveil this concept at the Geneva Motor Show, called the Intrado. Its body panels are made of lightweight steel, while its structure is made from carbon fiber. It shows off a hydrogen fuel-cell that uses a 36 kWh battery pack. While this is still a concept vehicle, reportedly the Intrado shows where the styling of the next-generation Tucson could be headed.

Coming up next, I’ll tell you why the United States should set a goal of getting off OPEC oil. It could be done before the decade is out.

LET’S GET OFF OPEC OIL
Remember the first oil embargo? I do. I remember the long gas lines, the dread of not being able to drive where I wanted to go, and that sick-to-the-pit-of-my-stomach feeling that America would never be the same again. It wasn’t.

When OPEC slashed oil production in late 1973 to protest the US’s support of Israel, prices quadrupled almost overnight. The economic damage was immediate. The US economy limped through the rest of the 1970’s suffering anemic growth, sky-high inflation, and stubborn unemployment.

Ever since then the US has dreamed of becoming energy independent. Now, nearly 40 years later, that dream is within our grasp.

Remember, the Organization of Petroleum Exporting Countries is a cartel. Cartels are illegal in the US and the rest of the developed world. So why are we dealing with an illegal organization?

Today, the US uses over 18 million barrels of petroleum and petroleum products every day. About 40% of that is imported and about half of that, or just under 4 million barrels a day, is imported from OPEC. So we need to put a plan together to get rid of that 4 million barrels.

CAFE regulations should eliminate 2 million barrels by 2025. US energy production is expected to grow by the equivalent of 2 million barrels in that time frame. So the math sure looks do-able.

Don’t you think the American public would rally around a goal to get off OPEC oil the same way the country took to President Kennedy’s challenge to put a man on the moon by the end of the the 1960’s? I sure do. It’s a simple message that everyone can understand and I think the effect would be electric.

So I hope you can help me in getting the word out. Tell your friends, family and your elected officials. Let’s get off OPEC oil.

Anyway, that’s my opinion and I’d like to hear yours. Shoot us an email, or use the comment section of the website. And that wraps up today’s report, thanks for watching.

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67 Comments to “AD #1320 – VW Makes A Lot of Money, Ford Dumps Microsoft, Time to Get Off OPEC Oil”

  1. G.A.Branigan Says:

    I would love to have us off of opek oil.I vividly remember that time,and still hate it.B50 bio diesel and make it using hemp oil,and some other good sources.Why diesel? Burns cleaner gets better mpg’s etc.I have my flame suit on so have at it,lol.

  2. pedro fernandez Says:

    Ever since the early 70′s, just about every politician that has run for any office has bowed to work towards this goal, if only half of them had meant it, we would have achieved that long ago!

  3. jamie Thompson Says:

    Re Opec Oil

    John just get the Us gov to go along with
    Keystone Pipeline, Between Us production and
    Canada’s abundance of oil. Won’t need Opec.

  4. T. Bejma Says:

    John,

    Keep in mind, that even though usage goes down through increased efficiency of the vehicles and production goes up in the same way, at least some of that decrease will be offset by the increasing population, manufacturing plants and more vehicles on the road. That should push out the elimination of OPEC oil out indefinitely, don’t you think?

  5. Mike Says:

    Many mid-eastern countries have built populations based on imported food/De-salted water paid for with oil revenues. What happens when they run out of water or people quit buying their oil?

  6. G.A.Branigan Says:

    @ Mike: I personally don’t give a damn what happens to them.They can take their money and learn how to grow their own food in the desert.It’s been here in the USA.They have the means to build more desalinization plants.And they can sell their oil to India,China etc.Don’t feel sorry for them,they brought this on themselves,and as Pedro pointed out,our politicians haven’t done much more then blow smoke in regards to energy independence.

  7. George Ricci Says:

    John,
    I would love to get off of OPEC oil, but we need to get off of ALL imported oil. You talked about CAFÉ standard reducing our oil needs by 2 million barrels, but as a long time listener I heard you talk about those standards will be revisited and might be reduced. The best way to reduce are oil needs is with cellulosic ethanol 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. We need the CAFÉ standard changed to encourage production of cars and trucks capable of running on E85 and the government making tax credits available for the construction of plants making cellulosic ethanol from garbage.

  8. dcars Says:

    Do I have this right? We,(through Exxon and BP etc. and who ever markets Gas/Oil in the US)buy oil on the open market at the lowest price from OPEC and everyone else who sells the commodity via this open market. Thus why do we care who provides the commodity? Due to the large amount of producers and our own production capabilities no single entity can control the market. Venezuela would like to think that they can cut us off, but I think if they restricted oil sales to the US they would hurt themselves more than they could hurt the US.

  9. Saginaw Bill Says:

    Great. Forty one years later Johnny Mac comes up with a plan. Ain’t that America!!!

  10. marshy Says:

    dcars,

    I think you’re on the right track. Even if the US was not on oil from outside, the companies would still be selling into the global market. If the offshore prices are higher, then they would sell into those markets. Meaning, regardless of where the US oil comes from, the US will still pay global prices.

    Case in point, taxes notwithstanding, here in Canada, our vehicle gas isn’t cheaper than in the US, and we _are_ oil independent.

  11. Bradley Says:

    Will Ford sell the Focus Wagon in the United States?

  12. Lex Says:

    Unfortunately John,

    OPEC Oil is like CRACK to Corporate America.
    Once hooked it is hard to get off of it!
    There are alot of people right here in the USA making alot of money buying and selling OPEC Oil. The best thing is to use up all the oil in the Middle East first so when they run dry they will have to come to us!

  13. Lex Says:

    Now that Ford has given the Focus an attractive front end maybe they will get around to revising the rear end.

  14. Lex Says:

    Maybe Ford has a better idea of what Blackberry is good for than Blackberry? A robust operationing system that can deliver fluid connectivity to vehicles on a single platform.

  15. Kit Gerhart Says:

    Does Blackberry still exist?

  16. Bradley Says:

    #13

    :) They do, Ford must have received basement prices to jump from a larger sinking ship to a smaller sinking ship.

  17. Alex Wellington Says:

    HTG who, I believe, worked for the oil business, should know that this is all irrelevant and just feel good motherhood and apple pie everybody agrees with, to get rid of OPEC or all imported oil,

    BUT the FACT is that oil is FUNGIBLE and it makes not one iota of difference who exports to whom and who imports from whom.

    What makes all the difference is that the US has gone from a huge oil importer to a possible (if clueless idiots like John Kerry ever shut up) BIG oil EXPORTER with all our newfound energy riches.

  18. Alex Wellington Says:

    The former CEO of BP put it best when he said, in a 60 minutes interview, that world oil is like it is all in one gigantic vat and everybody is drawing various quantities with a gigantic straw.

    Conclusion- again, not one iota of difference who exports to whom and who imports from whom.

  19. Alex Wellington Says:

    10 nonsense. Oil is the lifeblood of transportation, it will take many many decades to find something even remotely equivalent. Nothing has the high energy density of gasoline and especially diesel fuel. Certainly not batteries or natural gas.

  20. Alex Wellington Says:

    10 what is like crack to corporate America is the dirt-cheap interest rates that especially the current adsministration, but also the previous ones, have created by printing more and more worthles devalued dollars. FOOD inflation is HUGE, about 16%, not the overall fictional and irrelevant 3% or less inflation rate, and it affects the poor disproportionally.

  21. Chuck Grenci Says:

    John, I pretty much agree with your commentary (getting off the OPEC ‘wagon’), however just a point of correction (or maybe I’m wrong), prices after the ’73 embargo was closer to doubling (gasoline and crude); quadruple didn’t occur (from pre-embargo) till right around 1980.

  22. Drew Says:

    Alex… well said.

  23. MJB Says:

    11. Yes, please! I’d love to see those alien-looking tail lenses vanish.

    If there were ever an Autoline Daily design critique segment of “lift the pen” that should have been done (btw, John, what ever happened to those?), it’s on those overly curvaceous, uber wrap-around, almost octopus-like Focus tail lenses.

  24. Drew Says:

    11 & 21 – Get over it. Some people like that style. If you want to gripe about taillamp styling, stick to the new Corvette, the freshened Camaro, any VW, and any Nissan. Oh, I forgot about the completely forgettable Lexuses (Lexii?) rear ends.

  25. Drew Says:

    Oops… 11 and 23. Sorry, Chuck, I did not mean to catch you in my rant.

  26. Kit Gerhart Says:

    11, We can wish. At least they sell the hatch, which might have been on my shopping list when I bought the Prius, if the current Focus had been around in 2010.

  27. MJB Says:

    24. Yes, Drew… and ‘some people’ like Justin Beiber.

  28. DaveThompson Says:

    No need for OPEC at all plenty of Canadian oil on offer, not to mention Dakota bakken oil, not to mention CNG/LNG for class 8 trucks plus economy cars like the new corvette with 29 mpg compared to a ’67 ‘vette that gets maybe 10mpg

  29. vette0072 Says:

    Hey John…..Thanks for giving your viewers another opportunity to throw in our 2 cents worth!
    Energy independence! Hell Yes!
    1. Keystone Pipeline and make it for DOMESTIC USE ONLY!
    2. Offer cars that are designed to run on E-85 only. That way the car has better performance, lower emissions and higher mileage!
    3. Use of more “auto gas” as you’ve told us about on your program.
    4. Continue hybrid and electric vehicle production.
    5. Somehow reduce the cost of diesel fuel to make it more competitive with unleaded fuel.
    These are some of my thoughts I’ve compiled by watching/listening to you everyday.
    Many thanks!!!!

    vette

  30. HtG Says:

    OK John, who are you working for, Tusk or Underwood?

    Lots of Americans working in Saudi

  31. Alex Wellington Says:

    “Musical Stuhls”, eh, John? Good!

    “musikalische Stuehle”, even better!

  32. Alex Wellington Says:

    “Energy Independence” was a demagogic slogan for mass consumption first used by the infamous, disgraced president Richard Nixon.

    It is a phony, bogus, and economic illiterate slogan.

    I tried to explain why in the case of oil, but it is still not economically optimal for any fuel.

    IF energy independence ever makes economic sense, it will happen. IF it does not, it should not happen.

  33. Alex Wellington Says:

    24 Very good, Drew!

  34. G.A.Branigan Says:

    @ 29:Better performance=yes,lower emissions=maybe,better mpg’s=no way.If you have a vehicle that is rated for e85,check your owners manual.It will not say better mpg’s,instead it’s lower.My last two vehicles are rated for e85,non to be had within a 100+ miles of me.And the book says that rated mpg will decrease.

  35. Kit Gerhart Says:

    34,
    If vehicles were set up to run ONLY on E85, they would take advantage of the very high octane number of that fuel, and would get better mpg on that fuel than the current flex fuel vehicles which use compression ratios and tuning needed to run on 87 octane.

  36. G.A.Branigan Says:

    Until the e85 infrastructure is in place,it’s all moot.I did a google and the nearest e85 pump is an hour and a half away from me.I’ve been wanting to try it now for years,and will try it IF it ever becomes available in my area.But until they make vehicles to run on only e85,you’ll get definite reduced mpg’s as it stands right now.

  37. Rodger Says:

    Its so obvious. Build the Keystone pipeline!
    But billionaire Tom Steyer is giving like a Billion dollars to Democrats to make sure it wont be allowed. So much for progress.

  38. David Sprowl Says:

    All. I wrote a letter on 2/5/14 to John about this very issue. You can look it up with the above date as a reference. As others in this forum already stated, unless we can find another supplier, getting rid of OPEC and it’s effects on world energy nothing much will change. Oil is cheap, therefore we and the res of the world use it. We already know of a drop in replacement for crude oil – algae. It can be grown the world over and make most any country energy independent. The problem with algae as with other fuels is that it is far to expensive for ANY large country to get off of imported oil. I’d rather see our government push for algae due to it’s carbon neutral use and it’s renewability.

  39. Denis Says:

    You shouldn’t confuse retail Blackberry with their presence in the corporate and enterprise world. QNX Blackberry is the operating system used by GM, Honda and Hyundai/Kia. It is superior in every way. Good riddance to Microsoft.

    Want independence? Approve Keystone.

  40. HtG Says:

    OPEC

    Perhaps oil producers should be good sports about letting occidental states and oil majors dominate them? Let them compete against each other for sales of a commodity? Hey, why not let’s pass a law against cartels! All legal like

    We’re miserable bastards just like the people with the oil

    (On a lighter note, I did see my congresswoman take seriously a man who wanted to talk about off-shore drilling. So they will listen)

  41. HtG Says:

    38 Denis is right. QNX was bought by Blackberry in 2010, I believe. It’s an industry standard

  42. len Simpson Says:

    My view of bberry is that it will soon be a Ford
    possession, if not already.

  43. T. Bejma Says:

    Interesting article about long term vehicles…

    Funny, not a single BMW or Mercedes on the list…

    http://www.clickondetroit.com/money/consumer/200000-mile-club-which-vehicles-are-tops/-/1719076/24646514/-/11re069/-/index.html

  44. pedro fernandez Says:

    Hey, I’ve seen plenty of Camry and Corollas with over 200k miles and a few over 300k and one who is approaching 400k, what’s up with that?

  45. pedro fernandez Says:

    Everyone knows that trucks and truck-based SUV with their potent V8′s are usually the mileage kings, I just wonder if this will continue with all these turbo engines and excessive amount of electronics. Air shocks in the Silverado cost $2k to replace all 4

  46. Steve Weintraub Says:

    Getting independent of OPEC is easier than most understand. The US produces large amounts of oil that is exported. Simply quarantine all domestic production for domestic use only and there won’t be a need for OPEC oil!

  47. HtG Says:

    We’ve been restricting exports of crude oil since the ’70s.

    http://www.cfr.org/oil/case-allowing-us-crude-oil-exports/p31005

  48. cwolf Says:

    Regardless of OPEC, oil is a global commodity and price is based upon global demand. Do you honestly think the Arabs sell the US cheaper oil than the global price?
    The Keystone pipeline won’t help us either, just Warren Buffit. This oil,which is polluting the heck out of Canada’s lakes,streams and soil, is not destined as once planned to be refined by our refineries, but piped to Texas for export to the global market. There are no real jobs in numbers, just profits for investors. Canada and us just get to deal with the pollution.

  49. cwolf Says:

    I might be wrong about Buffit’s pro stance; he may be the anti pipeline guy cuz hauling oil by rail is even more profitable. Either way,you nor I will reap any of the benefit.

  50. HtG Says:

    Barry O. Surely doesn’t make decisions in haste, does he cwolf? (personal experience, talking)

  51. RonE Says:

    Petroleum & other liquids exported from the U.S.

    http://www.eia.gov/dnav/pet/pet_move_exp_dc_NUS-Z00_mbbl_a.htm

  52. HtG Says:

    In vino veritas

    Does anyone know if Ford has moved away from the Microsoft system to QNX because MSFT has told F that they intend to exit the car business? We know that MSFT has a new CEO and that change is likely. Maybe F had to jump. I don’t know the answer

  53. HtG Says:

    If I were MSFT I’d rather have my phone hardware and software be the hub for cars. SYNC may be crufty

  54. C-Tech Says:

    My understanding from current reports is that the U.S. is actually exporting finished products from the oil we pump out and import. It is illegal (currently) to sell U.S. sourced oil but ok to sell refined gasoline (and other products). The Big Oil companies are quietly lobbying Congress to change this rule.

  55. C-Tech Says:

    @ #42 I belive the reason you do not see any luxury cars on this list is a.) most luxury owners do not use their cars in the same way you use a work truck, and b.) the way this list is compiled is from used car trade-ins. Many people who have cars exceeding 200,000 miles are holding on to them, and/or they are passed down the family. My wheelwoman kept her Eclipse for 250,000 plus miles and only gave it up because someone smashed into it.

  56. Kit Gerhart Says:

    36,
    The availability of E-85 varies a lot by location. A few places have it near my place in Indiana, maybe because they grow a lot of corn in the area. From what I’ve heard, though, the actual percentage of ethanol is not over 85%, but can be less. If E-85 specific engines were sold, the percentage of ethanol would need to be more precise than that.

  57. G.A.Branigan Says:

    @ Pedro: What air shocks?

  58. Gary Purcell Says:

    I do not care about Imported Oil.

    I have a Ford Focus Electric, drove it 7,000 miles last year and saved $1,100 by not buying gasoline, compared with my 10 year old TSX Acura.

    There is no Oil in Electric Generation.

  59. Kit Gerhart Says:

    57, Some oil is used for electric generation in the US, but not a lot.

  60. Gary Purcell Says:

    Less than 1 percent is used in Electric Generation. And that is used as fuel oil to back up Natural Gas Plants, in case of a pipeline disruption. I worked in a 400 MW nat gas fired power plant.

  61. Kit Gerhart Says:

    The places I’ve been with a lot of their electric generation coming from oil, are small Caribbean islands. The power plant is a small concrete block building with a few exhaust stacks coming from the diesel engines running the generators.

  62. Brett Says:

    I agree about Ford acquiring Blackberry. QNX is a mature “real-time” version of Unix and it would be a plum for Ford to have their own captive platform. It’s the first thing that came to mind when I read the initial announcement.

    I’m waiting for Google Android for Automobiles to be announced, to be honest.

  63. G.A.Branigan Says:

    This is bad for some:

    https://www.youtube.com/embed/l7OadDz3Ums

  64. HtG Says:

    Kewl, GA

    Maybe the signal from the owners key fob is being recorded earlier, and then the ‘box’ repeats the code near the car? Does the car ping the key fob or the other way around? And didn’t it look like one guy wasn’t sure which car was going to open?

  65. Alex Wellington Says:

    Re the alleged 10 longer lasting vehicles.

    TJ You wondered why Merc and BMWs are not on the list? Really?

    First of, 9 of the 10 are trucks.

    Second, people with Mercs and Bmws are NOT using them like taxis and shuttles and don’t do huge nos of miles.

    Third, the wife of my first PhD student I chaired, who is a senior engineer at Ford, told us long time ago that Ford designed it cars to last 100k miles and its trucks to last 150k miles.

    So, no surprise really.

  66. Alex Wellington Says:

    TJ you are so totally biased, man!

    REally? Why no Mercs or BMWs on the list?

    Any reason why you did not ask why thgere were no CADDILLACS, (also BUICKS, and all kindf of other GM vehicles) on the list?

  67. Bob Wilson Says:

    Fight OPEC? . . . Start with voting with our wallet, money talks and anything else is nonsense.

    A commitment to OPEC independence starts with purchase of a personal, high MPG, vehicle to cut the demand. Our 10 year old, 52 MPG Prius has more than exceeded even the inflated and frequently false ‘payback’ analysis so popular when we bought it. With the average vehicle age of nearly 11 years, payback is not an issue. With the money saved, there is still room for a ‘boy toy’ but don’t waste a corvette sitting in a grid-locked, freeway.

    It would also help if the E85 markup, the difference between retail and wholesale price, did not subsidize cheap gas. E85 is more expensive per mile because of the excessive pump price . . . a retail price that follows gasoline prices, not the wholesale price of ethanol. The E85 retail price suggests price fixing, not supply and demand.

    Bob Wilson