Episode 157 – Congress Mad About Dealer Closings, Magna May Not Have Opel, Toyota’s Plug-In Prius

June 4th, 2009 at 12:05pm

Runtime 6:25

GM and Chrysler testified in the U.S. Congress yesterday, defending their decision to collectively close 3,400 car dealerships. The German government is still accepting bids for Opel. Toyota will start leasing plug-in electric hybrids by the end of this year. All that and more, plus a preview of a one-on-one interview with Bob Lutz.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. Congress pressures GM and Chrysler not to close so many dealers. Magna may not yet have Opel. And Toyota readies its plug-in hybrid. Up next, we’ll be back with the news behind the headlines.

This is Autoline Daily for Thursday, June 4, 2009. And now, the news.

General Motors CEO Fritz Henderson and Chrysler vice chairman Jim Press testified in the U.S. Congress, defending their decision to collectively close 3,400 car dealerships. Senators are upset that the automakers are closing so many stores that represent the tax base for so many communities, not to mention that car dealers typically make campaign contributions to local politicians. While the Obama Administration says it does not want to run the automakers, the Wall Street Journal says that Congress wants to take more control of the auto industry rescue.

Along those lines, the Detroit Free Press reports that Senate Republicans say the automotive bailout is unconstitutional. They’ve introduced a bill that would require Congress’ approval of any bailout money. And they’re trying to make this an amendment to a tobacco regulation bill, but the Freep reports that its chances are uncertain.

Yesterday we reported that General Motors hinted at the possibility it would not disclose financial information while it is in bankruptcy. But the company released a statement yesterday saying that it will provide regular financial updates while it is a private company.

Magna says it believes it will have its Opel deal finalized by September. However, according to Reuters, the German government is still accepting bids for Opel. This leaves the door open for Fiat and Chinese company Beijing Automotive Industry Corporation to improve their bids.

Meanwhile, another potential headache looms for Magna, according to the AFP, Volkswagen says Magna would face a conflict of interest if it partners with Opel because it is a major supplier to VW and its brands.

U.S. Senators have been scrambling to pass cash-for-clunkers legislation, but their efforts have hit a roadblock, at least for now. The Detroit News reports that supporters of the bill attempted to add it to a piece of tobacco legislation. The effort ran out of gas when the Appropriations Committee objected to funding the program from the $787 billion economic stimulus package.

Other countries have enacted similar measures with great success. Reuters reports that new car sales in Germany increased 40 percent last month thanks to a 2,500 Euro or about $3,300 incentive. However, some analysts predict that the program is only pulling sales forward and that they will collapse next year when it expires.

Toyota will start leasing plug-in electric hybrids by the end of THIS YEAR. 200 will be offered in Japan and 150 each in the U.S. and Europe. It’s a Prius with lithium-ion batteries that can be recharged by any household electrical outlet. They’ll also feature a gasoline engine to recharge the batteries.

And speaking of the Prius, Reuters reports that it was the best-selling car in Japan last month. It unseated the Honda Insight as the country’s top seller. The Insight took the sales crown in April which marks the first-time ever that a hybrid was the number-one seller in Japan.

Coming up next, a preview of a one-on-one interview we did with Bob Lutz, we’ll be back right after this.

When I was out of town earlier this week, my Autoline After Hours co-host Peter De Lorenzo had a chance to sit down with a few GM executives at the company’s “design dome” at its tech center in Warren, Michigan. Here’s what Bob Lutz had to say about what he thinks should happen with the Pontiac brand.

When GM invited us out to its tech center we also interviewed a couple other executives including Ed Welburn, the company’s Chief Designer. You can check out the rest of Peter’s chat with Bob Lutz as well as the rest of these interviews on our website a little later.

And that’s it for today’s top news in the global automotive industry, but don’t forget to check out Autoline After Hours tonight starting at 7:00 p.m. Eastern time. Join us for the most candid auto-themed discussion around this and every Thursday evening. Like I said, the show starts at 7:00 p.m. but swing by our website a little early because the cameras start rolling before that. Anyway, thanks for watching, we’ll see you TONIGHT.

13 Comments to “Episode 157 – Congress Mad About Dealer Closings, Magna May Not Have Opel, Toyota’s Plug-In Prius”

  1. » Episode 157 - Congress Mad About Dealer Closings, Magna May Not Have Opel, Toyota’s Plug-In Prius Wordpress UK: Wordpress UK, taking it further… Says:

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  2. Ron Paris Says:

    After summarily firing Rick Wagoner and advising the big three on what types of vehicles they should be building (readily admitting in a ’60 Minutes’ interview that he is not a “car guy”), why would Obama waste any more time micromanaging the auto industry? He knows full well that Congress is full of cronies just dying to fill that role!

  3. Gerald Thompson Says:

    We are going to miss Bob Lutz when he retires! I got to meet him in Charlotte in 2007 at the 2008 GM Fleet Preview. I was wearing my 2010 Camaro T-shirt that I had just bought from the GM Performance Parts booth at the car show in St. Ignis, Michigan. (It got his attention.) He was very gracious and listened to my viewpoints on the condition of the market. Meeting and conversing with a living legend was one of the highs in my life.

    Thank-you Mr. Lutz for your courage, inspiration and great products!

  4. Hermann the German Says:

    Ein blaues Hemd, sehr schon Johannes.

  5. Dave E. Says:

    Hi John,
    Whats in GM’s new vice chairman, Ed Steven’s garage? Hopefully it’s not a Pontiac Aztek!

  6. Tom Pascoe Says:

    Hi John, Wasn’t Congress ready to let all US automakers go out of business just a few months ago? What did they think would happen to the dealers and those employees? They didn’t care about the autoworkers, why do they care about the dealers?

  7. Alex Kovnat Says:

    >Here are today’s top headlines. Congress
    >pressures GM and Chrysler not to close
    >so many dealers.

    I think we should discuss this issue a little.

    I have the impression that the people who are now crying in their Starbucks coffee about dealership closings, are the same people – or else the same kind of people – who only yesterday were screaming with fear that the world was coming to an end from global warming. And who accordingly, voted to squeeze the auto industry with draconian 39 mile per gallon fuel economy requirements.

    But let factories or auto dealerships close in some congressperson’s district or some senator’s state, and then the same people – or the same kind of people – will now claim that unemployment will kill us all.

    I have been complaining for some time, that this kind of people seem to think the only reason for the automobile to exist at all, is to provide jobs. I don’t like that idea. My belief is that the most important obligation of the automobile industry to society (aside from the classical laissez-faire idea of making a profit for investors) is their job to us – namely, building fine cars for us to drive.

    If the only thing good about the automobile is that it employs people, then does that mean we should not only restrict imports, but also limit the extent to which automakers should be allowed to substitute capital for labor (i.e., automation)? Or perhaps, should we have gangs of vandals smash any car that’s more than seven years old or with more than 100,000 miles on the odometer? Or maybe, engineer cars to rust away after only that many years or miles?

  8. G.A.Branigan Says:

    @ Alex:you missed one salient point,those dealerships contibute to political parties.Thats the reason,thats the only reason that it gets this attention from congress.MONEY.

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  11. E. J. Johnson Says:

    I love the auto-biz and Michigan. I’m torn between the two now. But in the end, it’s in Michigan’s interest to limit the size and contribution made to the state’s economy by the auto companies and manufacturing … less than 20% for example. Let’s be responsible and look out for ourselves. We cannot let any industry become too big to fail, or deliver the kind of turmoil we are now enduring (soon to be social unrest?).

    Contemporary manufacturing does not deliver prosperity anyway. Just look at the condition of the areas in which they are now- or were located: Lansing, Flint, Detroit, Hamtramck, Wayne. They all look like the dystopia of Blade-Runner… sheesh… As a Mighiganian, I don’t want that mess in my state. And we don’t need armies of un-educated, low-paid, menial laborers. Send that stuff down South, or to China. If it would support a middle class, fine… otherwise, tell ‘em to take a hike…



  12. Eric Soto Says:

    Hay Bob, I do not think its to late,if all and I mean all Pontiac loyalist would speak out and con firm that Pontic should stay like you said “Pontiac by GMC” it would be a hit! The only thing that you need is to ad is the concept “ASC TRAN AM! And one way to help you, yes you in charge of “PONTIAC” is to have a specific web site indicating how important is Pontiac to us and the community. Its part of our heritage and like all “Americans” we preserve and maintain, not kill an American image!

  13. Richard Tait Says:

    Bob Lutz is an icon. A living legend. I really hope somebody at GM was listening to him and watching how he does things and try their best to emulate him as much as possible. What we should remember though, colleagues, is that right now Pontiac may be dead. But stranger things have happened. Old nameplates have been resurected in the past and have done pretty well for themselves. Maybe in another 10 or so years it may resurface in just the very way that Bob says it should. Maybe it will exist the same way that Lotus does. Have one or two models on showroom floors, while offering itself as a handling or performance guru to other manufacturers.