Episode 4 – GM Gunning for Chrysler, Toyota Builds Microcar, Harley-Davidson Sales Slump

October 17th, 2008 at 12:00pm

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GM is working on taking over Chrysler to help cut costs. Toyota introduces the iQ, the smallest car its ever built. Harley-Davidson wants a more diverse owner base due to slumping sales and profit losses. All that and more, plus, a look at Jeep’s range-extended electric vehicle.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. GM is working on taking over Chrysler. Toyota introduces a premium micro-compact car. And Harley-Davidson wants a more diverse owner base.

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

This is Autoline Daily for Friday, October 17, 2008. And now, the news.

The Wall Street Journal reports that GM is busy at work planning to take over Chrysler (subscription required). The Journal says GM believes it can cuts costs by $10 billion and get access to Chrysler’s $11 billion pile of cash. It also says that this move would trigger warrants that the UAW owns in Chrysler, which could give the union an ownership position in a combined GM-Chrysler.

Car companies are not the only ones being hurt by economic conditions. Harley Davidson sales fell 9 percent last quarter, while profit plunged 37 percent. Harley is also being hit by changing demographics in the United States. 91 percent of its buyers are white and overwhelmingly male. Harley’s COO Jim McCaslin says the company has to attract more African-American and Hispanic buyers and especially more women.

In Japan, Toyota just came out the iQ, the smallest car it’s ever built. This 4-seater is powered by a 1 liter engine, and is just under three meters long, which is less than 10 feet. Yet this dinky little car comes with stability control with steering assist, it has 9 airbags, and an airbag for the backlight, or back window on the car. Base price is about $13,000. It’s on sale now in Japan, will be sold in Europe next year, and possibly could show up in the American market.

On the heels of the report we did Wednesday of diesel sales slowing down in Europe, Autoblog is reporting that Ford is stopping development of its 4.4 L diesel for pick-up trucks. With pick-up sales slowing dramatically, and with Ford having to hoard cash, it decided to put the oil-burner on the back burner, for now.

Ward’s is reporting mixed results for the Mexican automotive market. Production of vehicles surged up 6.5 percent in Mexico last month, but sales fell 4.6 percent (subscription required). Alarmingly Chrysler saw sales of its passenger cars fall 51 percent.

In a related story Ward’s reports that Chrysler is dropping all-wheel-drive as an option in the Chrysler Sebring and Dodge Avenger and Caliber. Very few customers ordered all-wheel-drive, only about 1 percent. The unit is made by Borg-Warner, which says is sees a growing global trend to AWD. But with automakers under the gun to improve fuel economy and reduce CO2, all-wheel-drive in passenger cars may have a tougher time ahead.

Coming up next, in our feature story today we’ll look at how Chrysler planned to make an extended-range EV. We’ll be back, right after this.

Earlier this week we looked at Chrysler’s all-electric Dodge, based on the Lotus Europa. Today we’ll take a look at Jeep’s version of a range extended EV.

You can get more information about Chrysler’s electric vehicle program when Lou Rhodes joins me on this week’s broadcast version of Autoline, which is available on our website right now.

And that’s it for today’s top news in the global automotive industry, but don’t forget you can get podcasts, transcripts and a whole lot more on our website, AutolineDaily.TV. Thanks for watching, we’ll see you next week.

18 Comments to “Episode 4 – GM Gunning for Chrysler, Toyota Builds Microcar, Harley-Davidson Sales Slump”

  1. Greg Richard Says:

    I am getting more auto info than ever before. Great job. Keep going.

  2. Tom Tyson Says:

    John McElroy does an excellent job of presenting up-to-date automotive news on the internet! Autoline Daily is a vital new segment of AutoLine Detroit, and is even more pertinent than the weekly television show.

    Thanks! –Tom Tyson, High Point, North Carolina

  3. bob sushka Says:

    need to get autoline detroit back on the speed channel. Bob in Georgia.

  4. Julius Lambert Says:

    I can understand Chrysler building up 13B in the bank in the 90s.Where is this 11Bcoming from?They are NOT profetable, SO it must be coming from the US taxpayers hand out from CONGRESS.DID I hit it on the HEAD?This appears to be worse than when Daimler raped chryslerin the late 90s,because MBZ did not have R&D funds for a replacement of that massive BOX of the 90s.Daimler sucked up 13B,wasted Chrysler and did not market Chrysler products overseas,as Chrysler had planned.They DUMPED them back to the USto a VENTURE CAPITOLIST GROUP for 6.8B 80% stake.Now that is about 20minus their origional investment, and a NEW LINE for MBZ.NOW GM look at THIS.

  5. Salvador G. Says:

    Ok I dont like to make predictions :p but I do now believe that Chrysler and GM won’t happen… TRUST ME, IT WON’T HAPPEN.

  6. Tom Says:

    Salvador G. I think it might happen this time. Because Chyslers Owners wants to dump Chysler because Cebreus realised that if wants to make profit from the unit, it will have to wait way too long, maybe over a decade or two.

    And GM really wants to buy Chysler because it has 11 months worth of Cashflow. And it can save 10 months of expenses. If GM believes they are right they will do whatever they can.

    And Cebrus wants to trade chysler for the remaining shares of GMAC

  7. richard eaton Says:

    I understand that ford has a diesel engined escort over seas that gets 46 mpg,but they won’t import it to the USA because of diesel prices. how stupid is this,and is there any truth to this? richard eaton(mrdick@sbcglobal.net

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  10. CIBPOUPPY Says:

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  11. CIBPOUPPY Says:

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