Episode 153 – GM Needs Opel For Product, Fiat Skips Opel Meeting, Iacocca Loses Company Car

May 29th, 2009 at 12:00pm

Runtime 6:50

General Motors wants whoever takes Opel over to keep it within the company’s product development process. Fiat will not attend talks in Germany today to determine who should get Opel. Lee Iacocca is going to lose a big part of his Chrysler pension and his life-long supply of company cars. All that and more, plus a clip from last nights Autoline After Hours about the mistakes management made at the Detroit Three.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. GM still wants to do product development with Opel. Fiat will not attend today’s meeting on Opel. And Iacocca loses his company car.

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

This is Autoline Daily for Friday, May 29, 2009. And now, the news.

GM’s former vice chairman Bob Lutz said the company is looking for a new partner to take over Opel, not a new owner. He says GM wants whoever takes it over to keep Opel within the company’s product development process. GM’s North American operations rely on Opel to design and develop mid-size cars like the Chevrolet Malibu. But Lutz points out that Opel can’t develop a full product line on its own, implying it would have to rely on GM.

Meanwhile, the Wall Street Journal reports that Fiat will not attend talks in Germany today to determine who should get Opel (subscription required). Fiat’s CEO Sergio Marchionne slammed the talks as lacking transparency. Late in the negotiations yesterday GM said it needed an immediate 300 million euros to keep Opel afloat on top of the 1.5 billion euros it already requested. Fiat says it’s still interested in Opel, but based on what Marchionne said, and what Lutz said, it sure looks like Fiat is starting to fade in this deal. Besides, Magna is saying if it gets Opel it will not close any plants in Germany or lay off any German workers, and that is exactly what the German government wants to hear, especially in an election year.

Wednesday we reported that General Motors agreed to take back five Delphi plants, now, according to the New York Times, the auto task force is pushing for a sale of its other assets to help the company emerge from bankruptcy and avoid liquidation. Its assets could be sold to another supplier or an investment firm and GM may still take back other assets as well.

A Swedish court granted Saab an extension to give it more time to restructure. According to Reuters, Saab now has until August 20 to find a new owner and restructure its business. Saab said yesterday that it would announce a partner in the next few weeks and according to a Swedish newspaper report the front runners are Swedish luxury carmaker Koenigsegg, investment firm Renco Group, and Fiat.

Together, Ford and a company called Flame-Spray industries won an “Inventor of the Year” award for their new Plasma-Transferred Wire Arc system. The technology saves weight by helping make engines lighter. Instead of using heavy, cast-iron cylinder sleeves, the Plasma-Transferred Wire Arc system sprays engine bores with a light-weight, low-friction coating. This technology can cut up to six pounds from a V6 engine and improve its efficiency and performance. Ford has 95 issued and pending patents related to this technology. It should introduce it in North American powertrains within a year.

Another casualty of the Chrysler bankruptcy. Reuters reports that Lee Iacocca is going to lose a big part of his pension AND his life-long supply of company cars. Bob Nardelli said in bankruptcy court that the former CEO’s pension and other benefits were among obligations that a “NEW New Chrysler” wouldn’t have to pay.

Coming up next, a taste of what you might have missed on last night’s Autoline After Hours webcast, we’ll be back right after this.

In case you missed Autoline After Hours, we had Csaba Csere, the former editor-in-chief of Car and Driver Magazine, in the studio. The theme was all about the mistakes the Detroit Three made that got them into the trouble they’re in today, especially in cost cutting. In the following sound bite, Csaba talks about a specific example of how GM accountants made cost cutting decisions on the Oldsmobile Quad-Four engine.

If you want to check out the rest of the broadcast, you can watch the entire episode of Autoline After Hours on our website right now. It’s also available as a FREE podcast. Just search for it in iTunes.

Well, the last thing on today’s agenda today is to announce the winner of this week’s trivia contest. To celebrate the Indianapolis 500 we challenged you to tell us what year the first race was run. And the correct answer is … 1911.

And this week’s winner is… David Imes of Ashland, Kentucky. Congratulations Dave, you’ve just won a Ford Escape tote bag that’s actually made out of the car’s seat fabric.

Anyway, that’s it for today’s top news in the global automotive industry, have a nice weekend and we’ll see you Monday.

12 Comments to “Episode 153 – GM Needs Opel For Product, Fiat Skips Opel Meeting, Iacocca Loses Company Car”

  1. John W Pick Says:

    John, Will the diesel engine EVER make it to the American market in large numbers. Common sense says, more efficient, more street power, and longer life. Will American (big 3 management) ever think outside the bubble? Too many bean counters at those meetings………..

    Thank You for what you are doing.

  2. Tom Martin Says:

    To date, diesels don’t sell well in the U.S. They cost about as much as a hybrid, and fuel has been significantly more expensive than gasoline. They don’t make much economic sense.

    Recently the fuel cost has come down, but I suspect would quickly rise if a significant number of diesel vehicles are sold.

  3. Thor Says:

    John W

    I am a big proponent of the diesel, especially the Modern Diesel (NO relation to the god-awful diesels of the 80s and 70s), running on ultra-clean diesel fuel that we only got in the US since Oct 06,

    But your display of its advantages should be countered by its disadvantages, tre first and most important of which is its much higher “first cost”.

    If not for that, we would all drive 70 and 80 MPG Diesel Hybrids!

    As for Tom Martin’s comments, they are too pessimistic, and do not take into account that diesel fuel is currently 30 cents BELOW Regular Unleaded, instead of 30 cents above Premium, which it was last summer!!! That makes a TON of Econ sense to me, IF you drive 1) a lot and 2) Highway miles every year.

  4. William R. Walling Says:

    “Sorry no future FREE vehicles for Mr. Iaccoca.”
    History suggests this fellow DIRECTLY responsible for the ‘rebirth then death knell’ of CHRYSLER fortunes during his tenure.
    How so?
    1) Create a new CHRYSLER Corporation with novel product and innovative management personal then take a ‘working vacation’ to overview and solicit ‘Statue of Liberty-Ellis Island Foundation’ operations.
    2) This occurring during the EXACT time period personnel instrumental in CHRYSLER’S rebirth departed while future critical product delayed.
    3) Stated reasoning for management departures and product delays – ‘Mr. Iaccoca was occupied with non CHRYSLER associated functions’.
    4) Who else would have championed Mr. Eaton (Who?), at the expense of then existing CHRYSLER President Bob Lutz?
    5) Believed Mr. Iacocca was EMPLOYED to benefit CHRYSLER and clientele interests NOT rebuild National landmarks at their expense!
    During these intervening years too many words regarding Mr. Iaccoca and his legacy have been published only today highlighting the obvious – ‘Rebuilt then Cost America CHRYSLER!’.
    To this day Mr. Iaccoca publicly blames others associated which is sad as he KNOWS better!

  5. Alex Kajdi Says:


    I believe that GM will keep Opel in a partnership with the German Government until it can return to profitability, similar to what their plans are with the US Government. Either Government wants to loses manufactoring jobs, especially in Germany, where government elections are in September.

    Bob Lutz probably told the GM Board that they can not let Opel go because of, First – Product Development, and Second – European Markets.
    As I am hoping the Chevy Volt and it’s European version to be sold under Opel will be the beginning of a much needed interest in Electric Vehicles as the price of Oil steadily increase.

    The Chrysler Board and Obama Administration should give Lee Iacocca a New Electric Chrysler 200C so that he can help reintroduce the NEW NEW NEW Chrysler Corporation to the public, after Bankruptcy, as their returning spokesman.

    His Tag line could be: “We did it before and we can do it again, and I am living proof!”

  6. Alex Kovnat Says:

    The Diesel engine is in many ways the ideal traction engine. It has great low end torque, so a Diesel engine rated at 48 brake HP could result in launch performance as good as that of a gasoline engine rated at 75-90 bHP.

    In addition, since a Diesel engine does not throttle intake air to control output power, its brake specific fuel consumption doesn’t increase all that much as one reduces power from maximum rated power to, let’s say, 20% of same. Hence you have great fuel economy both on the highway and in stop-and-go traffic.

    Unfortunately, mother nature is fond of playing tricks on us. What worries me is the possibility that ultrafine particulates will emerge as the big showstopper issue.

    If it proves possible to reduce oxides of nitrogen and fine particulates to an acceptable level (and remember, this is a moving target what with regulations constantly becoming more stringent), and if low sulfur Diesel fuel becomes available wherever we Americans might want to go at a favorable price vis-a-vis regular gasoline, than I suppose we should be open-minded and give the Diesel a fair chance to compete.

  7. JIm Thykeson Says:

    GM should not jettison Opel. We might not think much of it here, but in Germany its a well regarded player. They recently developed a sports coupe which had a top speed of 140 plus and got around 144mpg! The Germans got this new ‘blue-tech’ deisel down. The car sort of looked like the Saturn Sky.

  8. G.A.Branigan Says:

    Although most people bawlk at the initial cost of a diesel,it is the wave of the near forseeable future.Many of us have to have a vehicle to work with,and pull trailers.I had a 4 cyl diesel in one of my vehicles that produced just 5 ft.lbs.LESS torque then my last F-150 (@300ft.lbs.).It was a 4×4 and without pulling a trailer,I got 33+mpg hwy.Not even the eco-boost can do that,and it ran on ultra low sulpher diesel fuel.True,that engine option was about 2 grand more,but well worth it when you figure in the “work” factor.Too many people are concerned with just cars.There are many of us who need a capable 4×4 vehicle both for the family,and work.And,like it or not,too many people are totaly dependent on the trades people,who need these vehicles.

  9. Thor Says:

    The Diesel is ideal for Trucks and SUVs and anything that tows, not cars. But it is also very appropriate for large cars, if I had the 3.0 Diesel on my 740iL 1998 (it is not even imported here), my HWY MPG would go from the current satisfactory 22-24 MPG at high speeds, to 30 or beyond, a 40% improvement

    It is hugely ironic that in Europe they all drive very small cars and most of them have diesels too!

  10. Thor Says:

    And with gas now at $2.75 and soon $3 for even regular (I have to use midgrade, or 89, per the car manual), and diesel (the ultra-clean low-sulfur we have since Oct 06) currently only $2.30 or less, the diesel option becomes even better.

    But somebody like me, who does less miles than the median or average driver a year, due to my short commute mostly, the diesel may not be worth the extra $2k, or, in many cases, $4k.

  11. G.A.Branigan Says:

    Diesels aren’t for everybody to be sure.They should however be available as an option in both light trucks and cars,including small cars.Diesel fuel is a byproduct of the refineing process for gas,add in some biodiesel and it should compensate for the increased use,or I would hope it would at any rate.The use of mid-grade or high test gas for cars might end up being more commonplace too,with the turbo charged engines like the Ford eco boost.At least in the not to distant past if you ran a turbo it required a higher octane.I wonder if that will be the case with engines like the eco boost.

  12. N. Bean Says:

    A pox on anyone who would take away Lido’s pension and lifetime ride–have we no shame?