Episode 139 – GM Posts $6B Loss, Chrysler Offers Big Incentives, Lexus Debut In Frankfurt

May 7th, 2009 at 12:00pm

Runtime 6:55

GM reported its first quarter earnings and ended up losing $6 billion. Chrysler had a terrible sales month in April, so now it’s offering up to $6,000 in incentives. Lexus will debut a compact, five-door hatchback at the Frankfurt Auto Show. All that and more, plus a look at the 2010 Cadillac SRX.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. GM posts a $6 billion first quarter loss. Chrysler offers massive incentives. And a look at the Cadillac SRX.

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

This is Autoline Daily for Thursday, May 7, 2009. And now, the news.

GM reported its first quarter earnings and while the numbers are in line with analyst expectations, it’s still a shock to see them. GM’s revenue fell by $20 billion, a 47 percent decline to just a little over $22 billion. The company ended up losing $6 billion for the quarter, and had $10 billion in negative cash flow and now has only $11.6 billion in total cash and securities. GM CEO Fritz Henderson says these numbers show why the company must quickly adopt its revised viability plan to lower its break-even point.

In related news, GM is expected to announce that it will begin reducing the number of dealers it has in the U.S. market by 2,600. The AP reports it is expected to quickly force 1,200 of those dealers out of business for failing to meet capital requirements, sales goals or customer satisfaction scores.

Car sales in the UK fell 25 percent last month, and part of the reason they fell has to do with the country’s cash-for-clunkers program, which is a £2,000 incentive, or about $3,000. The program doesn’t start until May 18th and many car buyers are holding off until then.

If you can’t sell cars, sell real estate. Renault will sell buildings in Europe (subscription required) in an effort to raise money. According to Ward’s, Renault could raise around 1 billion Euros because it plans to sell 138 buildings.

Ford wants to talk with the UAW about modifying its labor agreement, even though the union agreed to concessions in March. According to the Detroit Free Press, Ford wants the same concessions the UAW gave Chrysler last week.

Chrysler had a terrible sales month in April, so now it’s offering up to $6,000 in incentives in an effort to jump start sales. The company will offer up to $4,000 on 2009 vehicles, $1,000 for current owners, that is good towards most 2008 and 2009 Chrysler, Dodge and Jeep models, and up to $1,000 for those that finance their vehicle through a participating credit union.

Autoblog reports that Lexus will debut a compact, five-door hatchback at the Frankfurt Auto Show. Sized to compete with the BMW 1 Series and Audi A3, the new model would be built on the same architecture and share the same drivetrain as the HS250h hybrid. It will only offer this model in Europe.

More news on the alt-fuel front. The U.S. Department of Energy announced a $787 million program to stimulate biofuel research and production. The money is coming from President Obama’s American Recovery and Reinvestment Act. The goal is to jump-start alternative-fuel production and reduce America’s thirst for imported oil.

Autoblog reports that the reborn Chevy Camaro is so popular right now that GM had to add another shift to keep-up with demand. Orders are expected to be strong enough to keep the line in its Oshawa, Ontario plant running overtime through August. But the car already faces its first recall. About 300 Camaros with V8s have a battery cable that can rub against the starter motor and short out.

Coming up next, a look at the totally redesigned 2010 Cadillac SRX. We’ll be back right after this.

When the Cadillac SRX hits show room floors later this year, not only will it sport a new design but it’s going to be smaller and much sleeker looking than the previous model.

The previous SRX could seat up to seven with a third row. For 2010 seating will only be for five. The 2010 model is shorter in height, width and length.

The sleeker exterior design is highlighted by a character line that runs down the length of the body. The front-end features a chrome grille and Cadillac’s signature vertical headlamps. And adding to the sleeker look is an integrated spoiler in the rear that helps enhance aerodynamics as well.

Inside is what you would expect in a Cadillac. Hand-cut and sewn coverings accent the instrument panel and ambient lighting enhances the look. And to help give a cleaner look, the Navigation system rises from the center of the instrument panel.

Under the hood, the SRX is available with two V6 engines. A new 3.0-liter direct injection is standard and a 2.8-liter turbo is optional. Both engines are equipped to six-speed transmissions. Final numbers aren’t official but the 3.0-liter is expected to get 10 to 15 percent better fuel economy than the engine it replaces while getting 10 more horsepower. It also features an “eco” mode to help improve economy by altering transmission shift points.

Stability and handling is enhanced on the SRX by an all new all-wheel-drive system which includes an electronic slip differential that distributes torque as needed from side to side along the rear axle, as well as from the front to rear axle.

Safety features like head- and side-curtain airbags, rollover mitigation sensors, and trailer stability assist are standard. And since this will be sold in Europe it meets pedestrian protection standards there.

It’s got all the amenities you would expect too, like 3D imaging with the Nav system, integrated hard disk, and a dual screen for rear seat entertainment.

Pricing hasn’t been announced yet.

And that does it for today’s top news in the global automotive industry. But don’t forget to visit our website again tonight for another edition of Autoline After Hours. Jason Vines and Peter De Lorenzo are joining me in the studio for another unfiltered and unscripted episode. Things kick off at 7:00 p.m. Eastern time or 23:00 GMT so check it out on our website, AutolineDetroit.com.

Anyway, that’s it for today’s show, thanks for watching, we’ll see you tomorrow.

10 Comments to “Episode 139 – GM Posts $6B Loss, Chrysler Offers Big Incentives, Lexus Debut In Frankfurt”

  1. R. Rufty Says:

    The Cadillac SRX, where will it be built? Mexico? No money for GM or any other carmaker until all cars are built in the USA.

  2. diffrunt Says:

    Over & over mags & blogs say , “but this cool one is Europe only” —why?

  3. Alex Kovnat Says:

    Owing to a backlog of paperwork where I work, I haven’t had a chance to participate here until today.

    Although this is an old topic by now, I would like to say how disappointed I am that our government has seen fit to raise roof crush standards to 3 times static vehicle weight for sedans (cars as such).

    For years I have been concerned about the tendency of the cars we drive to be squeezed harder and harder between fuel economy and safety. We note in the May 5 edition of Autoline, that this new standard will reduce fuel economy, even as automakers are now being required to meet 35 mile per gallon CAFE standards. And make that 43 MPH in states like California, if guys like their current governor get their way.

    What I would like to know is, how much of a possibility is there of a car like what I now drive (2005 Toyota Corolla) to hurt me due to rollover, as opposed to other accident/injury modes? How much loss of performance should we, the automobile driving citizenry, have to put up with to reduce our chance of death or injury by a possibly infinitestimal amount? Is it not enough that in the future, cars will be weighted down with pedestrian protection devices?

    I have long had the feeling, that squeezing automobile performance to death between fuel economy and safety is exactly what automobile-hating intellectuals want. It is time we asked ourselves, how much should the road-going American citizenry have to compromise, to satisfy the needs of neurotic intellectuals on an ego and power trip?

  4. Brentton Says:

    It doesn’t supprise me that the Camaro is such a big hit. With the possibility of Chevrolet going under, the car would be an instant collector car, as it already is, but the newer ones would be awfuly rare.

    That Cadillac SRX is a nifty looking people mover. I have a feeling it will be an awfully expensive grocerie getter though. Better leave it for the special weekend trips, to impress those at your destinations.

  5. craigerzgt Says:

    @ Alex:

    I wonder what the comparison is currently between where cars are and where the IIHS/NHTSA (whoever it was) wants cars to be. If it’s a long way, can you imagine what the A-pillars are going to be like? Even some current models have A-pillars so thick that it can block a huge amount of important stuff from your vision.

    It doesn’t seem that Lexus has learned much from their IS300 wagon thing that they built. For as much as I know, they didn’t build that many of them, and now they’re wanting to build another one? And what kind of buyer is going to go after one? Bizarre.

  6. Alex Kovnat Says:

    @Craigerzgt:

    It is indeed frightening, that meeting the proposed new roof crush standard may increase the possibility of an accident in the first place by blocking the driver’s vision.

    If so, this is further proof of how important it is for we who are familiar with automotive engineering tradeoffs, to tell the (pseudo?) intellectual element that honestly, there are times when willingness to curb one’s ego is the better part of true concern for others.

  7. Salvador G. Says:

    -

    To John McElroy,

    You know something you guys haven’t talked about in Autoline Afterhours??

    -RACING-

    Penske is probably going to buy Saturn, the FIA will do massive cuts for Formula1 next year, the big 3 will be Ford, FIAT and Toyota in a couple of years and where does that leave NASCAR and will Honda leave the IRL next year??

    All I’m saying a IS, little more about racing will do guys good. :)

    hey! invite Roger Penske, Hell invite Robin Miller.

    SOMEBODY, thats all I’m saying.

    Thank you again,
    Keep up the good work.

    -

  8. Roger T Says:

    John, the Caddy SRX’s equipment list is pretty impressive, but when I saw it moving on your video, it screams Equinox. I guess it’s the roof and side lines that are to similar. Toyota still is the master at badge engineering, while GM still needs to learn a thing or two.

  9. David B. Fishburn Says:

    Mac, the news about the off-shoring of auto design should be a wake up call to everyone in the executive ranks. Obama is telling us to support the auto companies by buying american. That is quite a paradox. The moving of jobs is part of the problem, how is anyone going to be able to buy the cars, when they don’t have the jobs to be able to do so? I think that it is time that our government change the regulations to make it more profitable to keep the jobs here.

  10. Episode 139 GM Posts 6B Loss Chrysler Offers Big Incentives Lexus | Ispey Download And Search Videos, Images, News, Rapidshare.com Megaupload.com and more Says:

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