April 23rd, 2009 at 12:09pm
GM is going to close most of its plants in the U.S. for 9 weeks this summer. Chrysler’s banks get a counteroffer which would give them more money and stock. Toyota maintains its spot as the number one automaker in the world in the first quarter. All that and more, plus we uncover an important loophole in California’s CO2 legislation.
Transcript and Story Links after the jump . . .
Here are today’s top headlines. GM sends another signal about bankruptcy. Chrysler’s banks get a counteroffer. And we uncover an important loophole about CO2 legislation.
Up next, we’ll be back with the news behind the headlines.
This is Autoline Daily for Thursday, April 23, 2009. And now, the news.
Yesterday, GM let it be known that it’s going to close most of its plants in the U.S. for 9 weeks this summer. Normally, the company takes a two week shut down in July. According to Ward’s, GM had 122 day’s worth of inventory at the end of March (subscription required), which is high, but a lot lower than the 147 days it had in February. So why close down for 9 weeks? Here’s what I think is going on. This is a sign GM is preparing to go into bankruptcy, and GM knows its car sales will collapse when it does. GM hopes to get through any bankruptcy in two months, so why not close the plants for two months?
Yesterday we reported that the banks rejected the U.S. Treasury’s offer on what they’ll get for Chrysler. Today the Wall Street Journal reports the Treasury has a new offer (subscription required), which would give the banks more money and more stock. That brings both sides close, but they’re still $3 billion apart, and the deadline for any deal is one week from today.
While Fiat’s deal with Chrysler is still up in the air, its being reported that the Italian automaker is interested in Opel. According to German magazine Spiegel, Fiat will sign a letter of intent to buy a majority share in Opel next week. The magazine also said Magna Steyr was in constructive talks with GM over Opel. All three companies declined comment. GM must find a buyer for Opel for the company to receive aid from the German government.
Like other European countries, the UK is initiating a scrappage plan to stimulate new car sales. Autoblog reports that the program offers a £2,000 incentive to new vehicle buyers if they trade-in a car that’s at least 10 years old. Half of the roughly $3,000 discount is paid by the government and the other half by automakers. A similar program in Germany boosted sales by nearly 40 percent last month. Hopefully it will work in the British Isles. Tally ho!
Yesterday was earth day, and Chrysler used the occasion to unveil a green minivan. The company will provide the U.S. postal service with a fleet of 250 lithium-ion-powered vans for use around the country. Surprisingly, they WILL NOT have a range extender. This means they’re electric only and have no internal combustion engine to recharge the batteries if they run low. This shouldn’t be a problem though, because fixed postal routes are typically only 18 to 20 miles long. You know, maybe there’s more to the Chrysler’s EV program than meets the eye.
Last week we reported that it looked like Volkswagen would outsell Toyota in the first quarter this year. However, according to the AFP, the Japanese automaker was able to maintain its spot as the number one automaker in the world, despite suffering a 27 percent drop in sales. Toyota sold almost 1.8 million vehicles to VW’s 1.3 million in the first quarter.
Coming up next, some very interesting insight into California’s CO2 legislation. We’ve uncovered a major loophole. We’ll be back right after this.
Two days ago I interviewed Tom Cackette, the deputy director of the California Air Resources Board via webcam. He made a fascinating point about how fuel economy is calculated. After the EPA tests a car, it lowers the fuel economy by 20 percent to put a number on the label that reflects real world fuel economy. But for CO2 regulatory purposes, the California Air Resources Board uses the higher number that is not on the label.
We’ll be posting the full interview with Tom Cackette from the California Air Resources Board in the near future.
Hey, join me tonight for Autoline After Hours at 7 p.m. eastern. ‘Renzo and Vines are going to be there, and Matt DeLorenzo, the Editor-in-Chief of Road & Track magazine will be there. We’ll be rating Toyota’s brands, talking about the future of auto shows, and whether General Motors should change its name.
And that’s it for today’s show. Thanks for watching, we’ll see you tonight and tomorrow.