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Episode 311 – GM Restructures Europe, Chinese OEMs Eye Russia, WTO Investigates Tire Tariffs

January 21st, 2010 at 12:00pm

Runtime 8:10

GM starts restructuring its European operations by announcing plant closings and layoffs for some 8,500 Opel workers.  Chinese automakers could really takeoff in Russia now that they’re building vehicles in the country.  Kia is set to lose nearly $1 billion as workers strike at its three plants in South Korea.  All that and more, plus a look at Audi’s spectacular reveal of its redesigned flagship, the 2011 A8.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. The restructuring of the European auto industry is about to begin. Chinese automakers have their sights set on  Russia. And the Dodge Dakota could end up on the same platform as the Fiat Strada.

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

This is Autoline Daily for Thursday, January 21, 2010, and now, the news.

This could be the first step in the restructuring of the European auto industry. As expected, General Motors announced today that it will lay off 8,500 workers at Opel, including shutting its giant assembly plant in Antwerp, Belgium. All told, GM will reduce manufacturing capacity by 20 percent, and as Fiat’s CEO Sergio Marchionne has been warning, the rest of the European industry will have to do the same.

When Chinese cars started pouring into the Russian market two years ago, Vladimir Putin’s government slapped a $7,000 import tariff on them, almost doubling their price. But Gasgoo reports that Chinese automakers, led by Great Wall, are now starting to make cars in Russia. And one distributor predicts the Chinese could become the biggest foreign automakers in Russia in three years. However, it quotes another analyst as saying Russia will make sure it protects its domestic automakers.

Ward’s reports Kia could lose nearly $1 billion in cumulative revenue as workers strike at its three plants in South Korea.  Workers are demanding the same settlement Kia’s sister company, Hyundai, gave its employees, which agreed to a no-strike deal and a one-year pay freeze in exchange for several thousand dollars in bonuses.  A spokesman for the automaker says Kia has lost about 53,000 units of production since June.

It’s been rumored that the Dodge Dakota – or is it the Ram Dakota now? – will switch from its current body-on-frame architecture to a unitbody platform like the Honda Ridgeline.  According to Ward’s, Ram division President and CEO, Fred Diaz, confirms that the Fiat Strada COULD underpin a next-gen Dakota.  Right now the midsize truck is scheduled to be discontinued in twenty-eleven, but IF a successor is built, the Strada could be the one.  But some inside Chrysler worry that its 107-inch wheelbase is too short for Dakota buyers, however, smaller dimensions could give the truck better separation from the full-size Ram.

The World Trade Organization says it will investigate U.S. tariffs on Chinese tires. According to Gasgoo.com, a panel will look to see if the tariff violates WTO policies. The U.S. placed a three-year tariff on tires imported from China, starting at 35 percent the first and down to 25 percent in the third. China claims the tariffs are unfair and are protectionist.  A decision could take up to six months to make. Brazil has also slapped tariffs on Chinese tires.  I wonder if the Chinese are asking the WTO to look into that, too.

Yesterday we reported that California may pull out of the deal for fuel standards if the government didn’t make changes to rules, but now it’s backing down from that threat. According to the Detroit Free Press, the California Air Resources Board says it’s fully committed to the rules. Even still, CARB isn’t backing down from its comments that credits for zero-emission vehicles should be reduced and that fuel standards for vehicles should not be eased in.

Coming up next, a look at the al- new Audi A8.

Audi’s new A8 is an impressive re-do of the brand’s flagship sedan. Recently we went to the unveil of the car, and here’s what we learned.

Audi is on a roll right now, and one of my guests for our live webcast at the Washington DC auto show will be Johan de Nysschen, the head of Audi of America. That’s next Tuesday at 12:30 p.m.  And we welcome your questions as we also ask the politicos in DC their vision for the future of the auto industry. We’ll be posting the list of guests for that show in the John’s Journal section of our website later today. And by the way, if you live in the DC area, we have free tickets to the Washington DC Auto Show. Drop us a line and we’ll be happy to mail you some.

Don’t forget to tune in tonight for Autoline After Hours. Joining us live at 7 p.m. Eastern Time will be Jason Vines. That’s tonight at our website autolinedetroit.tv.

And that’s it for today’s top news in the global automotive industry.  Thanks for watching, we’ll see you next week.

Thanks to our Partners for embedding Autoline Daily on their websites: Autoblog, The Auto Channel, WardsAuto.com and WWJ Newsradio 950

37 Comments to “Episode 311 – GM Restructures Europe, Chinese OEMs Eye Russia, WTO Investigates Tire Tariffs”

  1. Alex Kovnat Says:

    >Yesterday we reported that Cali-
    >fornia may pull out of the deal
    >for fuel standards if the government
    >didn’t make changes to rules,
    >but now it’s backing down from
    >that threat.

    So I suppose some of us may be breathing a sigh of relief. But the way I see it, the U.S. position re CAFE and the California position, is not a comparison between good and bad but rather, a comparison between bad and worse.

  2. Ron Paris Says:

    Good riddence to the Dodge Dakota! I drove a ’98 model (my first purchase from an American auto manufacturer in 30+ years!)for almost 9 years and it was the worst ownership experience of my life. It was a classic case of a manufacturer’s warranty being virtually worthless, making it all the more painful for me to see Chrysler bailed out, once again, by the government last year. If any company deserved to go out of business, it was them!
    Could a Fiat-based Dakota be any worse? I think not.

  3. Nick Stevens Says:

    “Could a Fiat-based Dakota be any worse? I think not.”

    it would be perfect for all these secretaries and others who never needed a real truck, but wanted to POSE as truck drivers.

    The Fiat Dakota is a fake truck.

  4. Nick Stevens Says:

    The Fiat Strada was an ECONOBOX sedan or hatch that was NEVER designed with the provision that some loon would use its platform to build a truck, and a US-truck to boot! (there are a lot of tiny little trucks in Europe, but that is another story and segment. Even Fiat makes such trucks, so why bother with the non-truck Strada? Just use the Fiat TRUCK designs instead!

  5. LEX Says:

    Hey John,

    When the Auto Show comes to The Javis Center in New York I will take four tickets.

    The Chinese Auto Makers are first going to “Russia with Love”, after that it will be a
    “Red Dawn” a rising over North America.

    I can not wait to hear what Jason Vines has been up to. I hope Peter and David will also be in attendance.

    What the hell is wrong with Kia? They finally got a good looking product lineup being produced and they are pinching pennies with labor! I have a solution, double the size of the Kia plant in West Point, Georgia, and build all their vehicles here in the USA. We have plenty of out of work auto workers who need jobs.

  6. Kit Gerhart Says:

    There is a Strada pickup now made in Brazil which is sold many places, including the EU. I don’t know much about it, but it is probably more like a Rabbit pickup than anything else America has seen.

  7. Wayne Says:

    A note to Ron;
    I am now driving my second Dodge Dakota and have no complaints other than issues with ball joints, which have been covered by extended warranties. The first one lasted 14 years and was still in good mechanical shape (body not so much)when I got rid of it. The person who bought it from me was going to repair the body issues and keep it on the road. The one I have now is almost 10 years old and had the ball joint issues. Both of these trucks have been subjected to road salt and Canadian winters. I don’t see many Toyota or Nissan pick-ups lasting that long (or Ford Rangers for that matter). Both were just the right size for my needs and the dimensions of our garage. I will be dissappointed if the Dakota ceases production or is converted to a smaller unibody model. I guess I will have to find a less ideal alternative. The present model would make an ideal platform for a small diesel if someone at Fiat/Chrysler would see the wisdom of building them.

  8. pedro fernandez Says:

    What’s up with the Chinese tires? if they’re dangerous, then just ban them, if not, then is this a precursor to a tariff on Chinese cars which will them make them about the same price as the other brands sold here?

  9. Nick Stevens Says:

    Of course they are not dangerous, Pedro, are you kidding? It is the clueless idiots in the White House sucking up to their SPONSORS, the UNIONS, who make competing tires locally.

  10. pedro fernandez Says:

    If they place tariffs on Chinese cars, the Chinese officials are gonna be pretty pissed-off at this government, and do you want your lender to get really pissed off at you? I don’t think so!

  11. Nick Stevens Says:

    Pedro: you are correct, but are you assuming that the corrupt Dem idiots in Wash DC know what they are doing? if they did, they would not lose the Ted Kennedy Seat in the nation’s most liberal state!!

    The chinese government has made a major, majro shift in policy; since they have two trillion sinking US dollars in reserves, they do not need any more to over-export at dirt-cheap prices, but they can spend their $ on consumer goods like cars instead. 2009 was not an exception, the crazy growth in the Chinese internal car market will continue in 2010, because now is the turn of the smaller cities to get a ton of new cars, and in those cities they are actually more useful (less traffic jams!).

  12. Rick Fortney Says:

    OK Nick, ENOUGH! Car and Driver recently ran a test of tires and the Chinese tires weren’t rated HALF AS GOOD as the worst tire above them! Go do a search on their site and READ WHAT THEY HAVE TO SAY about them, and LOOK AT THE STATISTICS from the tests. The Chinese tires ARE dangerous and I WOULDN’T put them on my daughter’s bicycle! Why don’t you go out and GET THEM PUT ON YOUR VEHICLE(S) so you can save a couple dollars, but please LET ME KNOW where you will be driving so I can AVOID YOU!

    Also, don’t all the CAPS in your posts seriously look stupid?

  13. pedro fernandez Says:

    I’ve read that China will not be bringing cheap cars here, much like Hyundai and Kia did, instead they want to bring well-made, affordable vehicles to compete against what’s here already at a lower price. I seriously doubt they can pull that off, their quality leaves a lot to be desired, perhaps in about 5 years if they steal enough technology they can pull it off. I have a set of Chinese tires, but I would not put them on my son’s car, I’ve lived enough.

  14. Nick Stevens Says:

    Pedro: you are correct, but are you assuming that the corrupt Dem idiots in Wash DC know what they are doing? if they did, they would not lose the Ted Kennedy Seat in the nation’s most liberal state!!

    The chinese government has made a major, majro shift in policy; since they have two trillion sinking US dollars in reserves, they do not need any more to over-export at dirt-cheap prices, but they can spend their $ on consumer goods like cars instead. 2009 was not an exception, the crazy growth in the Chinese internal car market will continue in 2010, because now is the turn of the smaller cities to get a ton of new cars, and in those cities they are actually more useful (less traffic jams!).

    FORTNEY: I just looked at my previous post and there were NO caps whatsoever, as you can see.

    Go shout and Bark under some other tree.

  15. Nick Stevens Says:

    And in addition, Fotrney, what you say proves NOTHING. even if C&D is correct, and the chinese tires are not even “half as good” (define “good”!) than the other tires, this DOES NOT PROVE THEY ARE DEFECTIVE. Got it? in YOUR case, the caps were NECESSARY as you obviously do not understand the meaning of simple words in the English Language.

  16. Nick Stevens Says:

    To give you another example, Car and Driver can do a test of the 3-series BMW vs the… Kia Optima and may well find that the Kia is not “half as good” as the 3-series, but that does not mean the Kia is “defective”.

    Got it now, Fortney?

  17. Rick Fortney Says:

    Let’s see what you just posted, there they are again:

    FORTNEY: I just looked at my previous post and there were NO caps whatsoever, as you can see.

    And this is the post that was active when I posted. You go bark up a tree! Ask anyone, shouting with caps shows your lack of intelligence.

    Of course they are not dangerous, Pedro, are you kidding? It is the clueless idiots in the White House sucking up to their SPONSORS, the UNIONS, who make competing tires locally.

  18. Nick Stevens Says:

    PS Fortney, i use the tires recommended by my car manual, since I ca neasily afford them. BUT there are others that CANNOT afford expensive or even mid-priced tires and would welcome the COMPETITION. What are you afraid of? And tell us if you have a CONFLICT OF INTEREST, do you or a member of your family work for the domestic tire makers?

    But instead of telling us what to do, go pay your CC debt, or the CHinese will come calling and take everything, even your daugher’s bicycle!

  19. Rick Fortney Says:

    You people are blind or are seeing only what you want to see. I did not say the tires are defective, I said they are dangerous. Having little traction is dangerous. Has nothing to do with car comparisons, your politics or anything else. Talking about tires….

  20. Nick Stevens Says:

    The post I posted and re-posted contained NO words in caps in two paragraphs and hundreds of words.

    The post you selected contained only TWO words in caps among more than 50 words.

    My use of the caps is obvious. I am not using them as YOU do, to SHOUT, but only because the editor here does not allow me to use italics or to underline, and thus caps are my only way to EMPHASIZE the important words in my post.

    In any case, my posts were addressed to Pedro and others, but NOT to you, so who asked you? If they object to my use of caps, they can talk to me about it and I will try to remedy the problem. But until you tell me how to use italics or bold, (other than write my posts in a separate word file and then copy, which is time consuming), I can do little about it.

  21. Nick Stevens Says:

    “We people” use the english language PRECICELY and DO NOT misrepresent the tests. Car and Driver did NOT say they were dangerous, it said they were not half as good (a Very qualitative statement) than the others.

    A ton of things are dangerous. Driving around in a stupid, rollover prone SUV with underinflated tires is far more dangerous than some poor SOB getting a bunch of chinese tires for his (really a daewoo) Chevy Aveo. Even driving a 1,600 lb “Dumb” (aka Smart) on a long highway trip, when everybody else drives cars and trucks 2 and 4 times as big and heavy, is also potentially dangerous, if not lethal.

    As long as the tires meet the stringent US regulations, they should be allowed to be imported.

  22. Rick Fortney Says:

    Thought this was an open forum. A little criticism is part of the territory don’t you think?

    By the way, I am not employed in any area of the auto, auto supplier or auto parts industry, although I do confess to being a several decades old “gearhead.” I also am a firm believer in competition. I’m not a believer in the Chinese philosophy of manufacturing. (Heard any news on lead and cadmium lately?) And I won’t purchase any products that don’t appear to be safe, such as the Chinese tires. And John is right, why isn’t anyone complaining about the Brazilian tariffs?

    And I have two American brand vehicles with two “different” American brand tires on them. Whether or not they were made in America is another issue.

  23. Rick Fortney Says:

    Nick, I don’t care if they’re imported. I would just wish that no one purchases them! Hopefully we will always have a choice.

    And Nick, “stringent US regulations?” Remember you are talking about the government, right?

  24. Salvador G. Says:

    Hey, you brainiacs – don’t you ever consider that the real point on Chinese tires is not so much for defects but, because their ReAlLy cheap compare to tires manufacturer HERE.

    -Besides if their really defective and people here in the U.S. buy them, then the obvious will happen… Someone (probably more than a few) will have an accident, probably die and people will go mad and will demand that the U.S. goverment prohibit the import of tires from China and Etc, etc, etc and etc.

  25. pedro fernandez Says:

    Well, folks let’s not forget that we have been victims of dangerous and potentially dangerous Chinese products before, so why would tires be any different. I would hope that if the Feds have enough data to deem these tires dangerous they would order a recall like they did with the Firestones a few years ago. I also believe Cooper had a separation problems a few years back.

  26. Kit Gerhart Says:

    Any tires sold for use on road going vehicles have to meet DOT standards which are pretty comprehesive, as far structural design, etc. The cheap Chinese tires probably aren’t a lot more likely to blow out than other tires, if properly inflated. As far as cornering and braking performance, though, I suspect they are clearly at the bottom of the barrel.

  27. paulstewart Says:

    Now,Now, little Nicky Stevens if you keep this up I’ll send you to the corner for another time-out ! You’re 10th B-day won’t be till next year and I have told you several times, when we want your opinion I’ll give it to you !

  28. C-tech Says:

    John, is there a drawing or photo of the proposed new Dakota?

  29. HyundaiSmoke Says:

    Pedro, that would take 10 years at least for the Chinese to bring quality well made vehicles at an affordable price. By then it maybe too late for them to enter the US market.

    OR

    Most of the Econo Brands Follow Hyundai upmarket, and the affordable bugdet end of the market is almost wiped out=leaving the door wide open for the Chinese to walk right on in.

  30. HyundaiSmoke Says:

    Think about this, Daewoo Competes with Hyundai/KIA in Korea. If they compete with them in Korea, they will be forced to follow Hyundai upmarket.

    Just say that doesnt bode well for Buick’s future at all, as Chevy with its outsourced Lower Cost, More Modern/Youthful Looking Korean spec upmarket cars would easily take Buick’s place.

    Either that or Chevy sticks to being an Econo brand, and starts Outsourcing SAIC product, and Buick and Cadillac will get the Daewoo product.

    Like I said before, Id bet good money that Daewoo makes Cadillacs in 10 years.

    I even think the first SAIC outsurced product will be here in 5 years. The Next Gen Aveo is almost too good for Chevy, they are going to need a cheaper product that size. The Spark is too small to fit that purpose, s they will be forced to use Chinese products, Watch!!!

  31. HyundaiSmoke Says:

    If they sell the Aveo like the way many of the spy pics show it, they will be force to sell it as a Buick only product in a generation or 2, watch.

    The Aveo seems to be growing up faster than the actually chevy brand itself. However, Lower Trims of Cruze (the same trims we will get here) in Europe make a Hyundai Elantra Blue look like a Lexus. Trust me.

    The Lower trims of the Cruze sold in Europe=Cobalt Quality.

  32. Kit Gerhart Says:

    What Chevy dealers need is an Aveo that has “grown up.” The current one is near worst-in-class, and the only people who buy it are those who have a friend at their local Chevy dealer. If the next Aveo is as good as a Honda Fit, or better, it will fill a major void in Chevy show rooms.

  33. Rick Fortney Says:

    Kit….I hear the Aveo is coming out with a special sport model. I’ve been a GM guy my entire life, but not sure they could do anything to the Aveo to get me to buy one. And if I did I think my wife would shoot me. She calls them a death trap.

  34. HyundaiSmoke Says:

    Pedro, I still think we will get the first Chinese cars that smell like burning electric motors from a Chinese made Toy Monster Truck on the first day of sale!!! LMAO!!!

    They’ll make good cars, eventually.

  35. HyundaiSmoke Says:

    John, KIA plans to close the Sohari plant due to its poor quality controls and they are mad about that as well. The Sohari Plant makes the Rio, Sedona, and until West Point, GA-Sorrento.

    In terms of quality its still a Black mark on the entire company, and that’s why they are closing. Rio Production is being moved to the Accent Plant with its superior quality controls at Ulsan.

    KIA claims that the Closing of the Sohari plant will bring it up to Where Hyundai is in quality and reliability right now virtally overnight.

  36. Nick Stevens Says:

    “# Kit Gerhart Says:
    January 21st, 2010 at 5:55 pm

    Any tires sold for use on road going vehicles have to meet DOT standards which are pretty comprehesive, as far structural design, etc. The cheap Chinese tires probably aren’t a lot more likely to blow out than other tires, if properly inflated.”

    I’m glad you wrote this 100% correct post so I would not have to repeat it in response to the others.

    ” As far as cornering and braking performance, though, I suspect they are clearly at the bottom of the barrel.”

    Compared to the value of the vehicle and the lives of the people in it, tires, even top-of-the line (non-exotic) tires recommended by the maker, are quite cheap. I would not go discount on MY tires, since even $100,000 cars only need $600 or so for a quartet of all season tires (top tier, recommended in the car manual). But if the chinese tires meet the specs, I want them to be available to anybody who is on a tight budget or whatever and wants to use them.

    The US should continue to be a free and open market to all products that meet our very stringent specs.

    And Pedro, of course I am aware of the scandals with the lead in toys made in China etc, but 1. I doubt this was intentional, they would be fools to knowingly commit business suicide by doing that, and 2. A tire maker is a far bigger, serious, heavy manufacturer than any toy maker in China, and I expect less nasty surprises from them.

  37. Roger T Says:

    On the DAKOTA version of STRADA – Mind Strada is the pickup version of an extended Fiat Palio, a car designed for the Brazilian market (competes with Fiesta and the sub-Golf Gol). Pickup versions of compact cars are very successful in Latin America and Europe, for their econo price, compact dimensions and roomy bed. As far as I know, this will be the first time in America where a vehicle’s successor will be substantially smaller than the vehicle it replaces. Sounds like Marchioni is trying to expand on the Ford Connect success, with an open bed that is.