Audi will unveil a production version of the A8 hybrid sedan at the Frankfurt auto show.
Audi said the A8 hybrid uses a four-cylinder gasoline engine for the first time in the A8 range. The 245hp 2.0-liter unit is combined with a 54hp electric motor powered by a lithium ion battery pack weighing 37kg.
The car has a range of 3km while driven on battery power alone.
Audi says the A8 hybrid will reach 0-100kph (62 mph) in 7.7 seconds and it has a top speed of 235kph (146mph). It uses 6.4 liters of fuel per 100km (44 UK mpg; 36.5 U.S. mpg) and has CO2 emissions of below 148g/km.
The hybrid has an aluminum construction, which Audi says will make it one of the lightest sedans in its category, weighing 231kg, about 40 percent lighter than a comparable steel construction.
The car will go on sale in Europe in late 2012.
Showing posts with label News. Show all posts
Showing posts with label News. Show all posts
Tuesday, August 30, 2011
Friday, August 26, 2011
New Cafe Rules Not All Bad: Turbo Usage Expected To Triple
If you want to get substantially better fuel economy out of a car or truck, your options for doing so are somewhat limited. You can lighten the vehicle, but doing so is likely to reduce overall strength or substantially increase the price. You can add a hybrid drivetrain, but that adds weight, increases complexity and adds to the price. You can downsize the engine, but few drivers are willing to accept a significant reduction in power just to gain a few more mpgs. There’s another choice, though, and it’s one that’s being rapidly embraced by manufacturers as the best and most cost-effective solution: downsize the engine, and then turbocharge it.
In the old days, turbos had a questionable reputation for reliability. Formula One engines of the 1980’s, for example, were small displacement, turbocharged four-cylinders that ran massive amounts of boost to create power. Calling these engines fragile is an understatement, and spectacular engine failures were common. Even on road cars, turbos often experienced bearing problems related to oil circulation, and engine failure was far more common than on less stressed, normally aspirated cars.
Not so with the new generation of turbocharged cars. Ford’s EcoBoost, for example, runs a modest amount of boost, but pumps the additional air into an engine that already has high compression and gasoline direct injection. High compression and turbocharging used to be a recipe for disaster, but today’s knock-sensing technology makes such a setup possible. The end result is more power, plus better fuel economy, from a smaller displacement engine.
Turbo and component supplier Honeywell sees the writing on the wall. Their vice president of engineering, Steve McKinley, summed it up by saying, “Engine downsizing coupled with turbos is the quickest way to make a significant improvement in the overall fuel efficiency of the U.S. automotive portfolio while maintaining performance levels.” In other words, now would probably be a very good time to invest in Honeywell stock.
GM agrees with this philosophy, too, and offers a 1.4-liter turbo option for their Cruze compact sedan. The upcoming Sonic will have a forced-induction engine choice, too, and don’t be surprised to see turbocharged fours replacing V-6s and I-6s throughout many manufacturer’s product lines.
More power from less gas? What’s not to like about that?
Source: Left Lane News
In the old days, turbos had a questionable reputation for reliability. Formula One engines of the 1980’s, for example, were small displacement, turbocharged four-cylinders that ran massive amounts of boost to create power. Calling these engines fragile is an understatement, and spectacular engine failures were common. Even on road cars, turbos often experienced bearing problems related to oil circulation, and engine failure was far more common than on less stressed, normally aspirated cars.
Not so with the new generation of turbocharged cars. Ford’s EcoBoost, for example, runs a modest amount of boost, but pumps the additional air into an engine that already has high compression and gasoline direct injection. High compression and turbocharging used to be a recipe for disaster, but today’s knock-sensing technology makes such a setup possible. The end result is more power, plus better fuel economy, from a smaller displacement engine.
Turbo and component supplier Honeywell sees the writing on the wall. Their vice president of engineering, Steve McKinley, summed it up by saying, “Engine downsizing coupled with turbos is the quickest way to make a significant improvement in the overall fuel efficiency of the U.S. automotive portfolio while maintaining performance levels.” In other words, now would probably be a very good time to invest in Honeywell stock.
GM agrees with this philosophy, too, and offers a 1.4-liter turbo option for their Cruze compact sedan. The upcoming Sonic will have a forced-induction engine choice, too, and don’t be surprised to see turbocharged fours replacing V-6s and I-6s throughout many manufacturer’s product lines.
More power from less gas? What’s not to like about that?
Source: Left Lane News
Friday, February 25, 2011
Alternative-fuelers’ day is coming -- but not for a while
Again this year, auto show visitors are fascinated by electric cars, hybrids and all manner of alternative-fuel vehicles.
They check fit and finish. They climb inside and look closely at design, appointments, even carpets. They question salesmen about price, equipment, range and delivery time.
One thing most of the visitors don’t do: They don’t buy those vehicles.
Last year, Americans bought an estimated 275,000 alternative-fuelers, according to the National Renewable Energy Laboratory. That’s about 2.4 percent of the 11.6 million new vehicles sold in the United States in 2010. Not exactly a tidal wave of demand. And more than half (140,928) of those sales were Toyota Prius units.
But don’t write off the hybrids and others in that category. Their day is coming; it just hasn’t arrived yet. And it won’t arrive tomorrow or the next day. Price is a major obstacle; $41,000 for a Chevrolet Volt? You’ve got to be kidding.
And driving range is just as great a hurdle for the pure electrics. Would-be owners are afraid of being stranded out in the boondocks, far from an electrical outlet, or even on an expressway on the way home from work.
Manufacturers speak cautiously of a 100-mile range. Sure, on a flat, straight road with no air conditioning, no headlights, no radio or other energy-draining gadget. With air, headlights, etc., the range is likely to be closer to 60 miles, maybe less. And can you imagine being stuck in a traffic jam on a summer day with no air conditioning?
Someday, we may all be driving vehicles that don’t gulp imported oil, but don’t set your alarm or mark your calendar. I figure that day is at least a generation away. Until then, Americans will stick to their internal combustion engines.
Trucks are back again
U.S. sales of light vehicles are rising, and the reason is spelled t-r-u-c-k-s. Trucks.
Truck sales were unbelievably high in the1990s and the early years of this century. They reached their apex in 2004 with 9.2 million. That’s right; more than 9 million trucks were sold in a single year!
Trucks outsold cars from 2002 through 2007.
Then came the summer of 2008 and $4-a-gallon gasoline, and there went the truck boom.
And now trucks are roaring again. Not as loudly as before, but loud enough. They outsold cars in October, November and December and again in January.
Let’s look at some numbers. In January, sales of small cars were up 14 percent over last year. Mid-range cars (the industry’s best-selling segment) rose just 5 percent, and the near-luxury, luxury and highest-priced cars climbed 10 percent.
Small change compared with truck gains. SUV sales advanced 21 percent in January; pickups, 24 percent and crossovers, 30 percent. The big surprise was the minivan segment, which reported a sales increase of 59 percent for the month. Have soccer moms had a change of heart?
But as truck sales rise, so do gasoline prices. And now Middle East tensions are pushing prices up further. The average nationwide price for a gallon of regular today is $3.25, up from $3.15 last week and from $2.70 a year ago, according to gasoline price tracker gasbuddy.com.
In the last truck boom, the Detroit 3 virtually ignored cars and turned all their efforts toward trucks. Dealers had little or nothing to show shoppers when cars came back in style.
Forewarned is forearmed.
They check fit and finish. They climb inside and look closely at design, appointments, even carpets. They question salesmen about price, equipment, range and delivery time.
One thing most of the visitors don’t do: They don’t buy those vehicles.
Last year, Americans bought an estimated 275,000 alternative-fuelers, according to the National Renewable Energy Laboratory. That’s about 2.4 percent of the 11.6 million new vehicles sold in the United States in 2010. Not exactly a tidal wave of demand. And more than half (140,928) of those sales were Toyota Prius units.
But don’t write off the hybrids and others in that category. Their day is coming; it just hasn’t arrived yet. And it won’t arrive tomorrow or the next day. Price is a major obstacle; $41,000 for a Chevrolet Volt? You’ve got to be kidding.
And driving range is just as great a hurdle for the pure electrics. Would-be owners are afraid of being stranded out in the boondocks, far from an electrical outlet, or even on an expressway on the way home from work.
Manufacturers speak cautiously of a 100-mile range. Sure, on a flat, straight road with no air conditioning, no headlights, no radio or other energy-draining gadget. With air, headlights, etc., the range is likely to be closer to 60 miles, maybe less. And can you imagine being stuck in a traffic jam on a summer day with no air conditioning?
Someday, we may all be driving vehicles that don’t gulp imported oil, but don’t set your alarm or mark your calendar. I figure that day is at least a generation away. Until then, Americans will stick to their internal combustion engines.
Trucks are back again
U.S. sales of light vehicles are rising, and the reason is spelled t-r-u-c-k-s. Trucks.
Truck sales were unbelievably high in the1990s and the early years of this century. They reached their apex in 2004 with 9.2 million. That’s right; more than 9 million trucks were sold in a single year!
Trucks outsold cars from 2002 through 2007.
Then came the summer of 2008 and $4-a-gallon gasoline, and there went the truck boom.
And now trucks are roaring again. Not as loudly as before, but loud enough. They outsold cars in October, November and December and again in January.
Let’s look at some numbers. In January, sales of small cars were up 14 percent over last year. Mid-range cars (the industry’s best-selling segment) rose just 5 percent, and the near-luxury, luxury and highest-priced cars climbed 10 percent.
Small change compared with truck gains. SUV sales advanced 21 percent in January; pickups, 24 percent and crossovers, 30 percent. The big surprise was the minivan segment, which reported a sales increase of 59 percent for the month. Have soccer moms had a change of heart?
But as truck sales rise, so do gasoline prices. And now Middle East tensions are pushing prices up further. The average nationwide price for a gallon of regular today is $3.25, up from $3.15 last week and from $2.70 a year ago, according to gasoline price tracker gasbuddy.com.
In the last truck boom, the Detroit 3 virtually ignored cars and turned all their efforts toward trucks. Dealers had little or nothing to show shoppers when cars came back in style.
Forewarned is forearmed.
Sunday, November 28, 2010
On-board Internet is just around the corner, experts say
BERLIN -- On-board Internet will soon become a regular option in cars as the necessary technology makes its mass market breakthrough in the next few years. That is the view of experts meeting at the Automobilwoche Congress in Berlin.
“On-board Internet can be here very quickly. It can happen in two to three years. It goes hand-in hand with the continued, rapid development of car-to car communication" Ulrich Kurth, an automotive specialist at T-Systems told the Congress.
Automobilwoche is a sister publication of Automotive News Europe.
All the components necessary to roll out the technology are at hand. "The chemical mixture has become explosive. We have everything. Now it's only a matter of how these components come together." he added.
But Stefan Bratzel, manager of the Center of Automotive at the University of Applied Sciences in Bergisch Gladbach added a cautionary note, warning automakers that they shouldn't underestimate the attractions of on-board Internet and allow non-automotive companies to provide universal standards for the technology before they do.
“We are going to have the Google generation in high-volume cars. The industry must internalize this from the outset,” Bratzel said.
Attracting young drivers
Bratzel added that the Internet could play a key role in making cars more attractive to young people, who already use Internet regularly.
“To become more attractive to young people, the auto industry must offer something that they now use naturally on a daily basis.”
He added that carmakers could also use the technology to maintain and shape future customer relationships.
“On-board Internet can assure the OEMs' contact with the customer beyond the sales process,” he said.
But not every aspect of the existing technology for on-board Internet points to the future, according to T-Systems's Kurth. He doesn't consider the current leading applications such as Ford Sync and Onstar to be the way forward.
“These solutions continue to be quite simple," Kurth said. "They don't lend themselves to expansion.”
“On-board Internet can be here very quickly. It can happen in two to three years. It goes hand-in hand with the continued, rapid development of car-to car communication" Ulrich Kurth, an automotive specialist at T-Systems told the Congress.
Automobilwoche is a sister publication of Automotive News Europe.
All the components necessary to roll out the technology are at hand. "The chemical mixture has become explosive. We have everything. Now it's only a matter of how these components come together." he added.
But Stefan Bratzel, manager of the Center of Automotive at the University of Applied Sciences in Bergisch Gladbach added a cautionary note, warning automakers that they shouldn't underestimate the attractions of on-board Internet and allow non-automotive companies to provide universal standards for the technology before they do.
“We are going to have the Google generation in high-volume cars. The industry must internalize this from the outset,” Bratzel said.
Attracting young drivers
Bratzel added that the Internet could play a key role in making cars more attractive to young people, who already use Internet regularly.
“To become more attractive to young people, the auto industry must offer something that they now use naturally on a daily basis.”
He added that carmakers could also use the technology to maintain and shape future customer relationships.
“On-board Internet can assure the OEMs' contact with the customer beyond the sales process,” he said.
But not every aspect of the existing technology for on-board Internet points to the future, according to T-Systems's Kurth. He doesn't consider the current leading applications such as Ford Sync and Onstar to be the way forward.
“These solutions continue to be quite simple," Kurth said. "They don't lend themselves to expansion.”
Thursday, June 03, 2010
Mercury production to end in Q4
Ford Motor Co. will discontinue its 71-year-old Mercury brand and end vehicle production in the fourth quarter, Mark Fields, Ford's president of the Americas, said today.
Fields also announced plans to expand the Lincoln lineup with seven new or refreshed vehicles in the next four years.
Ford product development chief Derrick Kuzak said a new compact car will be developed for Lincoln. The car will be based on the same platform that the 2011 Ford Focus sits on, but it will be designed and engineered specifically for Lincoln, he said.
The final decision to kill Mercury was made this week and approved by Ford's board today, Fields said.
A total of 1,712 dealerships sell the Mercury brand in the United States, but there are no stand-alone Mercury stores. Among the Mercury stores, 511 also have Ford franchises, 276 are combined with Lincoln franchises, and 925 are dualed with both Ford and Lincoln franchises.
Some of the 276 Lincoln-Mercury dealerships are in markets that cannot support a stand-alone Lincoln store, Fields said. He said Ford Motor will work with those stores, helping them to either get a Ford franchise or consolidate their Lincoln franchise with a Ford store.
“We do foresee in some markets there could be some stand-alone Lincoln dealerships,” Fields said.
More information to come
Mercury dealers will all receive packets tomorrow morning outlining Ford's transition plan for the brand and outlining monetary compensation for their stores based on a formula Ford has developed, Fields said.
Fields said Ford decided to close Mercury during its annual spring business and product review. Ford division's improved market share -- up 2.2 percentage points through April compared with last year -- combined with the fact that most Mercury customers cross-shop the Ford brand, made it sensible to cut Mercury, Fields said.
“And it allows us to put 100 percent of our resources into Ford and Lincoln,” he said.
Dealer Bob Tasca Jr., who heads the Lincoln Mercury brands of the dealer council, calls this an emotional decision because it will affect dealers' lives.
“Some of the dealers have their homes mortgaged to their business,” said Tasca, who has two Ford-Lincoln/Mercury stores, one in Rhode Island and one in Massachusetts. “Some are going to make it, and some won't. But I really expect Ford will be fair.”
Ed Tonkin, chairman of the National Automobile Dealers Association, called it “a sad day.”
“NADA's concern is that Ford treats each of its Mercury dealers fairly and equitably,” he said, “especially the 276 of whom sell Lincoln and Mercury exclusively.
“Ford also needs to move quickly to take into account the millions of dollars that dealers have invested in facilities, equipment, personnel and training. They deserve fair compensation.”
Fields said Ford will offer special incentives to move Mercury vehicles this summer. He said he expects most of the Mercury inventory to be sold off by the end of this year.
There will be no job cuts that result from the demise of Mercury. Ford will redeploy any Mercury personnel to the Lincoln brand.
Besides an expanded lineup, Lincoln also gets an expanded marketing team, Fields said.
Ford declined to reveal how much it will cost the company to discontinue Mercury but said Ford's recent profitability has made it possible to make the move now. Ford reported a second quarter net profit of $2.1 billion.
Good thing in the long run
Peter Gervais, general manager of Gervais Lincoln-Mercury in Lowell, Mass., said in the long run the move “will probably be a good thing.”
"Lincoln has a little more brand status than Mercury," he added. “I think it was overdue and it should have happened beforehand.”
Ed Witt of Witt Lincoln-Mercury in San Diego, Calif., said he was optimistic about the switch.
“We love our Mercury brand. On the other hand, we are excited to take on a brand like Lincoln and making it a luxury brand. They're going to take the Lincoln brand to where it's never been before.”
He said he though Ford's leadership would take care of the Mercury dealers.
“Look at what they've been doing,” he said. “They've done it through leadership and focus and that's what we're going to do with Lincoln. This Mercury question has been around forever, a thorn in my saddle.
“We have definition, we have structure, and we have focus and direction. What else could I want? I think it's a big opportunity.”
Dealers reached by Automotive News said they weren't surprised.
“All I can say is this: I hate it,” said Robert Hammett, general manager of Hammett Motor Co. in Durant, Miss. “But they really don't need to make two of the same vehicles and put two different names on them. Mercury should have been a totally different outfit. Everybody has been expecting it.”
Glenn Mahoney, sales manager at Dana Ford Lincoln Mercury in Staten Island, N.Y., said some customers have been concerned.
“The dealers will still be here to warrant the cars, we're a dual point,” he said. “I think it is going be great, if we actually expand the Lincoln brand. It's kind of an overkill (with Lincoln and Mercury). The product lines are practically on top of each other.
“So, from that standpoint it was an interchangeable part. From being a dual store, it was nice to have both sides for us. It was kind of nice to have that area to move. I think Mercury sales will do pretty well throughout the end of the year.”
Fields also announced plans to expand the Lincoln lineup with seven new or refreshed vehicles in the next four years.
Ford product development chief Derrick Kuzak said a new compact car will be developed for Lincoln. The car will be based on the same platform that the 2011 Ford Focus sits on, but it will be designed and engineered specifically for Lincoln, he said.
The final decision to kill Mercury was made this week and approved by Ford's board today, Fields said.
A total of 1,712 dealerships sell the Mercury brand in the United States, but there are no stand-alone Mercury stores. Among the Mercury stores, 511 also have Ford franchises, 276 are combined with Lincoln franchises, and 925 are dualed with both Ford and Lincoln franchises.
Some of the 276 Lincoln-Mercury dealerships are in markets that cannot support a stand-alone Lincoln store, Fields said. He said Ford Motor will work with those stores, helping them to either get a Ford franchise or consolidate their Lincoln franchise with a Ford store.
“We do foresee in some markets there could be some stand-alone Lincoln dealerships,” Fields said.
More information to come
Mercury dealers will all receive packets tomorrow morning outlining Ford's transition plan for the brand and outlining monetary compensation for their stores based on a formula Ford has developed, Fields said.
Fields said Ford decided to close Mercury during its annual spring business and product review. Ford division's improved market share -- up 2.2 percentage points through April compared with last year -- combined with the fact that most Mercury customers cross-shop the Ford brand, made it sensible to cut Mercury, Fields said.
“And it allows us to put 100 percent of our resources into Ford and Lincoln,” he said.
Dealer Bob Tasca Jr., who heads the Lincoln Mercury brands of the dealer council, calls this an emotional decision because it will affect dealers' lives.
“Some of the dealers have their homes mortgaged to their business,” said Tasca, who has two Ford-Lincoln/Mercury stores, one in Rhode Island and one in Massachusetts. “Some are going to make it, and some won't. But I really expect Ford will be fair.”
Ed Tonkin, chairman of the National Automobile Dealers Association, called it “a sad day.”
“NADA's concern is that Ford treats each of its Mercury dealers fairly and equitably,” he said, “especially the 276 of whom sell Lincoln and Mercury exclusively.
“Ford also needs to move quickly to take into account the millions of dollars that dealers have invested in facilities, equipment, personnel and training. They deserve fair compensation.”
Fields said Ford will offer special incentives to move Mercury vehicles this summer. He said he expects most of the Mercury inventory to be sold off by the end of this year.
There will be no job cuts that result from the demise of Mercury. Ford will redeploy any Mercury personnel to the Lincoln brand.
Besides an expanded lineup, Lincoln also gets an expanded marketing team, Fields said.
Ford declined to reveal how much it will cost the company to discontinue Mercury but said Ford's recent profitability has made it possible to make the move now. Ford reported a second quarter net profit of $2.1 billion.
Good thing in the long run
Peter Gervais, general manager of Gervais Lincoln-Mercury in Lowell, Mass., said in the long run the move “will probably be a good thing.”
"Lincoln has a little more brand status than Mercury," he added. “I think it was overdue and it should have happened beforehand.”
Ed Witt of Witt Lincoln-Mercury in San Diego, Calif., said he was optimistic about the switch.
“We love our Mercury brand. On the other hand, we are excited to take on a brand like Lincoln and making it a luxury brand. They're going to take the Lincoln brand to where it's never been before.”
He said he though Ford's leadership would take care of the Mercury dealers.
“Look at what they've been doing,” he said. “They've done it through leadership and focus and that's what we're going to do with Lincoln. This Mercury question has been around forever, a thorn in my saddle.
“We have definition, we have structure, and we have focus and direction. What else could I want? I think it's a big opportunity.”
Dealers reached by Automotive News said they weren't surprised.
“All I can say is this: I hate it,” said Robert Hammett, general manager of Hammett Motor Co. in Durant, Miss. “But they really don't need to make two of the same vehicles and put two different names on them. Mercury should have been a totally different outfit. Everybody has been expecting it.”
Glenn Mahoney, sales manager at Dana Ford Lincoln Mercury in Staten Island, N.Y., said some customers have been concerned.
“The dealers will still be here to warrant the cars, we're a dual point,” he said. “I think it is going be great, if we actually expand the Lincoln brand. It's kind of an overkill (with Lincoln and Mercury). The product lines are practically on top of each other.
“So, from that standpoint it was an interchangeable part. From being a dual store, it was nice to have both sides for us. It was kind of nice to have that area to move. I think Mercury sales will do pretty well throughout the end of the year.”
Thursday, May 20, 2010
Tesla to make EVs with Toyota, buy NUMMI
Toyota Motor Corp. and Tesla Motors Inc. will become partners to produce electric vehicles at New United Motor Manufacturing Inc. in Fremont, Calif., a plant that Toyota last year ruled too inefficient to keep open.
Tesla will acquire the now-closed NUMMI property and employ 1,000 people building unspecified electric vehicles in a partnership with the world's largest automaker, the companies announced today in Palo Alto, Calif.
Toyota will invest $50 million in the small California-based electric sports maker in exchange for Tesla's common stock when the EV company completes its planned initial public offering.
Speaking at the announcement, Toyota President Akio Toyoda said he admired the entrepreneurial spirit at Tesla and hoped the venture will teach Toyota about quick decision-making and flexibility.
“Decades ago,” Toyoda said, “Toyota was also born as a venture business. By partnering with Tesla, my hope is that all Toyota employees will recall that venture business spirit, and take on the challenges of the future.”
Tesla CEO Elon Musk said his company would spend “a couple of hundred million dollars” preparing NUMMI for the project.
NUMMI, a former joint venture between Toyota and General Motors, closed earlier this year amid a storm of criticism from the plant's UAW work force.
Musk said the negotiations to acquire the closed plant concluded yesterday.
He said that Tesla's next model, a Model S that will debut in 2012, will only account for about 20,000 units a year, but said other models will follow off of the Model S platform.
“We're going to be occupying a little corner,” Musk said.
He said that eventually the project would account for 10,000 jobs, including supplier jobs.
Tesla's Model S is being made possible thanks to a $465 million low-interest loan from the U.S. Department of Energy. Until that product appears, Tesla is marketing a two-seat electric sports car that retails for more than $100,000.
Tesla has said that the Model S will sell for closer to $40,000.
Until now, Toyota has expressed little interest in electric cars. The Japanese automaker has staked considerable research and marketing investment on its popular hybrid-drive vehicles, including the Prius and hybrid Camry
Tesla will acquire the now-closed NUMMI property and employ 1,000 people building unspecified electric vehicles in a partnership with the world's largest automaker, the companies announced today in Palo Alto, Calif.
Toyota will invest $50 million in the small California-based electric sports maker in exchange for Tesla's common stock when the EV company completes its planned initial public offering.
Speaking at the announcement, Toyota President Akio Toyoda said he admired the entrepreneurial spirit at Tesla and hoped the venture will teach Toyota about quick decision-making and flexibility.
“Decades ago,” Toyoda said, “Toyota was also born as a venture business. By partnering with Tesla, my hope is that all Toyota employees will recall that venture business spirit, and take on the challenges of the future.”
Tesla CEO Elon Musk said his company would spend “a couple of hundred million dollars” preparing NUMMI for the project.
NUMMI, a former joint venture between Toyota and General Motors, closed earlier this year amid a storm of criticism from the plant's UAW work force.
Musk said the negotiations to acquire the closed plant concluded yesterday.
He said that Tesla's next model, a Model S that will debut in 2012, will only account for about 20,000 units a year, but said other models will follow off of the Model S platform.
“We're going to be occupying a little corner,” Musk said.
He said that eventually the project would account for 10,000 jobs, including supplier jobs.
Tesla's Model S is being made possible thanks to a $465 million low-interest loan from the U.S. Department of Energy. Until that product appears, Tesla is marketing a two-seat electric sports car that retails for more than $100,000.
Tesla has said that the Model S will sell for closer to $40,000.
Until now, Toyota has expressed little interest in electric cars. The Japanese automaker has staked considerable research and marketing investment on its popular hybrid-drive vehicles, including the Prius and hybrid Camry
Tuesday, May 18, 2010
GM posts $865 million Q1 profit
General Motors Co. posted a first-quarter profit as production snapped back and said it was making progress on a turnaround expected to put it on track toward its first full-year profit since 2004.
Analysts said the results underscored the progress GM made by slashing costs in a bankruptcy funded by the Obama administration and kept open the prospect of the automaker launching an initial public offering as soon as this year.
GM recorded a net profit of $865 million, compared with a loss of $5.98 billion a year before, as it ramped up production by nearly 57 percent from year-earlier levels to meet steadier demand in the United States and a sales boom in China.
"Now that we have achieved profitability, the next step is to achieve sustainable profitability," CFO Chris Liddell told reporters.
Liddell said GM had a "good chance" of making a profit for all of 2010, although gains from ramping up production would fade after the first quarter.
He declined to offer a forecast for the rest of 2010. He also put some conditions on the timing of a possible initial public offering.
GM will make an IPO only “when the markets and the company are ready,” he said. “What's out of our control are the readiness of the markets and the status of the global auto industry.”
In addition, GM Controller Nick Cyprus cautioned that GM must further refine its internal financial controls before company managers have a clear view of financial performance. He expressed optimism that would be accomplished before an IPO.
GM received $50 billion of U.S. government financing for its restructuring in bankruptcy. It has been aiming to launch an IPO that would allow the U.S. government to reduce its stake of nearly 61 percent in the automaker.
“The unfortunate process of bankruptcy is yielding positive results,” Rebecca Lindland, an analyst at IHS Global Insight, said in an interview. “It certainly keeps them on track for an IPO.”
Revenue soars
First-quarter revenue was $31.48 billion, a 40 percent advance from a year earlier, when GM was on the brink of bankruptcy after collapsing U.S. demand sent the industry into a tailspin. The automaker generated $1 billion in free cash flow during the quarter and said it ended the period with $35.7 billion in cash.
GM's first-quarter global sales rose 23 percent to nearly 2 million vehicles, including sales of GM's affiliate brands in China: Wuling and FAW-GM.
GM used bankruptcy to drop brands, cull U.S. dealerships and reduce debt. At the end of the first quarter, GM had debt and preferred stock of just over $20 billion, down from $54 billion a year earlier with government creditors taking the place of bondholders.
"The promise of the bankruptcy was to reduce costs, and it worked. That bodes well for the future," said John Wolkonowicz, an analyst with IHS Global Insight.
GM posted a $4.3 billion loss in 2009, from the time it emerged from bankruptcy in early July until the end of the year. The automaker fell into bankruptcy after losses of about $88 billion from 2005 through the first quarter of 2009.
Analysts have said GM still faces steep challenges in repairing the reputation of its brands led by Chevrolet in its home market. Another area of weakness is Europe, where GM posted a first-quarter loss of $506 million and sales for its Opel and Vauxhall brands were down almost 1 percent.
"They're headed in the right direction, but one quarter is not going to turn the ship around," said Mirko Mikelic, a portfolio manager for Fifth Third Asset Management.
GM's market share was stable at 11 percent of global sales and at about 18 percent of North American sales.
U.S. rivals
IHS Global Insight's Wolkonowicz said the results showed GM was in a stronger position than its smaller rival, Chrysler, while still lagging Ford Motor Co. Ford posted a $2.1 billion first-quarter profit and has forecast that it will be solidly profitable for 2010.
In a step aimed at strengthening its ability to compete with rivals, GM has been looking at options to re-establish a captive auto financing arm, people with knowledge of the plans said last week.
Such a move would mark a nearly complete reversal of the process that started in late 2006 when GM sold off a controlling stake in GMAC to raise cash.
Detroit-based GMAC, now known as Ally Financial, is 56 percent owned by the U.S. Treasury after the government injected $17 billion as part of a restructuring that also saw the finance company become a commercial bank.
Liddell said it was "incredibly important" for GM to have a strong financing partner but said it was "debatable" whether that needed to be a captive finance firm as GMAC once was.
Analysts said the results underscored the progress GM made by slashing costs in a bankruptcy funded by the Obama administration and kept open the prospect of the automaker launching an initial public offering as soon as this year.
GM recorded a net profit of $865 million, compared with a loss of $5.98 billion a year before, as it ramped up production by nearly 57 percent from year-earlier levels to meet steadier demand in the United States and a sales boom in China.
"Now that we have achieved profitability, the next step is to achieve sustainable profitability," CFO Chris Liddell told reporters.
Liddell said GM had a "good chance" of making a profit for all of 2010, although gains from ramping up production would fade after the first quarter.
He declined to offer a forecast for the rest of 2010. He also put some conditions on the timing of a possible initial public offering.
GM will make an IPO only “when the markets and the company are ready,” he said. “What's out of our control are the readiness of the markets and the status of the global auto industry.”
In addition, GM Controller Nick Cyprus cautioned that GM must further refine its internal financial controls before company managers have a clear view of financial performance. He expressed optimism that would be accomplished before an IPO.
GM received $50 billion of U.S. government financing for its restructuring in bankruptcy. It has been aiming to launch an IPO that would allow the U.S. government to reduce its stake of nearly 61 percent in the automaker.
“The unfortunate process of bankruptcy is yielding positive results,” Rebecca Lindland, an analyst at IHS Global Insight, said in an interview. “It certainly keeps them on track for an IPO.”
Revenue soars
First-quarter revenue was $31.48 billion, a 40 percent advance from a year earlier, when GM was on the brink of bankruptcy after collapsing U.S. demand sent the industry into a tailspin. The automaker generated $1 billion in free cash flow during the quarter and said it ended the period with $35.7 billion in cash.
GM's first-quarter global sales rose 23 percent to nearly 2 million vehicles, including sales of GM's affiliate brands in China: Wuling and FAW-GM.
GM used bankruptcy to drop brands, cull U.S. dealerships and reduce debt. At the end of the first quarter, GM had debt and preferred stock of just over $20 billion, down from $54 billion a year earlier with government creditors taking the place of bondholders.
"The promise of the bankruptcy was to reduce costs, and it worked. That bodes well for the future," said John Wolkonowicz, an analyst with IHS Global Insight.
GM posted a $4.3 billion loss in 2009, from the time it emerged from bankruptcy in early July until the end of the year. The automaker fell into bankruptcy after losses of about $88 billion from 2005 through the first quarter of 2009.
Analysts have said GM still faces steep challenges in repairing the reputation of its brands led by Chevrolet in its home market. Another area of weakness is Europe, where GM posted a first-quarter loss of $506 million and sales for its Opel and Vauxhall brands were down almost 1 percent.
"They're headed in the right direction, but one quarter is not going to turn the ship around," said Mirko Mikelic, a portfolio manager for Fifth Third Asset Management.
GM's market share was stable at 11 percent of global sales and at about 18 percent of North American sales.
U.S. rivals
IHS Global Insight's Wolkonowicz said the results showed GM was in a stronger position than its smaller rival, Chrysler, while still lagging Ford Motor Co. Ford posted a $2.1 billion first-quarter profit and has forecast that it will be solidly profitable for 2010.
In a step aimed at strengthening its ability to compete with rivals, GM has been looking at options to re-establish a captive auto financing arm, people with knowledge of the plans said last week.
Such a move would mark a nearly complete reversal of the process that started in late 2006 when GM sold off a controlling stake in GMAC to raise cash.
Detroit-based GMAC, now known as Ally Financial, is 56 percent owned by the U.S. Treasury after the government injected $17 billion as part of a restructuring that also saw the finance company become a commercial bank.
Liddell said it was "incredibly important" for GM to have a strong financing partner but said it was "debatable" whether that needed to be a captive finance firm as GMAC once was.
Tuesday, May 04, 2010
Dodge Caliber being probed for sticky pedal issue, U.S. says
Chrysler Group's 2007 Dodge Caliber cars are under federal investigation for unintended acceleration caused by a sticky pedal -- the same type of problem that led to a large Toyota recall this year.
The National Highway Traffic Safety Administration said it is investigating as many as 161,000 Calibers for an accelerator pedal that “can stick or bind and not return to the idle position when it is released.”
The safety agency has received five customer complaints but no reports of deaths, injuries or crashes.
Chrysler's own investigation has narrowed the population of suspect vehicles to 10,000 that were made during five weeks in March and April 2006, a company spokesman said.
Supplier issue?
The problem appears to be a mechanical one caused by parts made by CTS Corp., of Elkhart, Ind., Chrysler spokesman Nick Cappa said.
A NHTSA official said the automaker had been cooperative.
“The manufacturer is responsible for the performance of the car, and that's who we're investigating,” a NHTSA official said. “Chrysler has been cooperative.”
CTS also was blamed by Toyota Motor Corp. for its sticky gas pedals, which led to a January recall of 2.1 million vehicles.
The supplier denied the Toyota charge, noting that the automaker has recalled millions of other vehicles for unintended acceleration that were not equipped with CTS pedals.
CTS did not immediately respond today to a request for comment.
Electronic defects probed
In the wake of Toyota's worldwide recall of 9 million vehicles for unintended acceleration, NHTSA has been investigating the possible role played by electronic defects in triggering speed control problems across the auto industry.
Toyota's problems have been far more extensive -- and far more severe, with reports of dozens of deaths and injuries -- than the possible defects under investigation at Chrysler.
Chrysler said today that the sticky-pedal problem “is mechanical in nature and not a design or electronic issue.”
Cappa said Chrysler was able to narrow the problem population to 10,000 vehicles after being alerted to customer complaints by NHTSA on April 23 and then comparing complaints to warranty data.
On April 29, NHTSA opened a preliminary evaluation, the first stage of a formal investigation, the agency said on its Web site. This review can lead to an engineering analysis and, ultimately, a recall.
Four of the five complainants reported that they had found bushings -- bearings made of brass to allow the pedal to pivot -- on the driver's side floor, NHTSA said.
Without the bushings, the pedal arm “can become misaligned” and be prevented from returning to the idle position, the agency said.
Dodge vs. Toyota
The CTS pedals used in the Dodge Calibers are different from those used in the recalled Toyotas, a NHTSA official said.
Chrysler said that since 2003, the Caliber has been equipped with a brake override system that reduces power when both the brake and the gas pedal are depressed.
Most Toyota vehicles have not had a brake override system, which would be mandated under legislation to be discussed at a congressional committee hearing Thursday.
But some consumer complaints to NHTSA raise questions about the effectiveness of the Chrysler brake override system.
One complainant reported that while traveling at 65 mph, the Dodge Caliber accelerated suddenly to over 90 mph, a report on NHTSA's site said. Neither the brakes nor emergency brake could stop the car. It slowed only when the car was put in neutral, the driver said.
Another complainant said that while driving his Caliber at 15 mph, it “abnormally accelerated” to 75 mph. The driver reached over and lifted the pedal with his hand, he said.
One complainant expressed frustration with Chrysler's response to his reports and appealed to NHTSA to investigate.
“I am not getting any satisfaction from Chrysler; they continue to blow me off,” he said. “Please respond; no one else does.”
Wednesday, April 28, 2010
Ford's $2.1 billion profit may be year's best as costs begin to rise
Ford Motor Co.'s first-quarter profit of $2.1 billion may be as good as it gets this year as the automaker faces rising costs to introduce new models.
Today's earnings report came with a plan to boost second-quarter production and spurred CEO Alan Mulally to forecast a “solid” 2010 profit, a year ahead of his previous prediction. Future quarters may not be as strong, CFO Lewis Booth said today.
“It would be unwise to think of $2 billion as a running rate,” Booth told reporters. “We've got a lot of new product launches, so you'll see some launch expense and we do expect some headwinds from commodities” prices.
The executives cited challenges such as a “fragile” economy after posting a fourth straight quarter of net income, the longest streak since 2005. Booth said the Ford Motor Credit unit was unlikely to “keep up the pace” for the rest of the year.
“The first quarter could turn out to be their best,” said Joe Phillippi, president of AutoTrends Consulting in Short Hills, New Jersey. “The landscape might become more competitive as Toyota fights its way back and GM launches a lot of new products.”
Ford said second-quarter production in North America will be 625,000 vehicles, a 5 percent increase from the plan announced March 2. Output will rise 39 percent compared with a year earlier.
Ford benefited from a recovering auto market and higher prices that added $1 billion to pretax operating earnings. Excluding some gains and costs, earnings were 46 cents a share, topping the 31-cent average of 12 estimates compiled by Bloomberg.
Market share
A 37 percent surge in U.S. sales in the first quarter more than doubled the industrywide increase, helping Ford add domestic market share at the fastest pace in 33 years after becoming the only major U.S. automaker to avoid bankruptcy in 2009.
Profit was buoyed by Ford Credit's $828 million of pretax operating income, after a $36 million year-earlier loss. Ford Credit, which lends to dealers and buyers, will earn about $2 billion on an operating basis in 2010, Ford said. The unit will pay Ford a dividend of $2 billion this year, up from a previous forecast of $1.5 billion, Booth said.
Himanshu Patel, a JPMorgan Chase & Co. analyst in New York, said in a note that the unit's first-quarter gains were driven by rising resale prices and are “unsustainable.” He advises holding Ford shares.
Ford shares slid 6.3 percent, to $13.55, at 4:02 p.m. in New York Stock Exchange composite trading. The stock tumbled as much as 9.1 percent earlier in the day, the most since May 12, after almost tripling in the 12 months through yesterday.
Regional results
In North America, Ford had a pretax operating profit of $1.2 billion, following a $665 million loss in the first three months of 2009. Revenue climbed 41 percent to $14.1 billion.
Ford also posted better results in all regions outside North America.
• Ford South America reported operating profit of $203 million versus $63 million a year ago. Higher costs prevented even higher profits, the company said. First quarter revenue was $2 billion, up from $1.4 billion.
• Ford Europe posted a profit versus a loss last year. The unit enjoyed higher sales, lower costs and higher parts profit. First-quarter operating profits were $107 million, compared with a loss of $585 million a year ago. Revenue jumped to $7.7 billion versus $5.8 billion.
• Ford Asia Pacific Africa also erased a loss last year. The region posted operating profit of $23 million, compared with a loss of $97 million a year ago. Higher sales in China boosted results.
Factory conversions
Some factories will close temporarily in the second half while being converted to build a new version of the Focus compact car, Booth said. Ford's price gains will “deteriorate” with the debut of the Focus and the Fiesta small cars this year because those models are less expensive, he said.
The Fusion sedan, F-150 pickup and Fusion drove first-quarter U.S. sales increases, Booth said.
“The most important thing Ford has done is invest heavily in new product during this down cycle,” said Erich Merkle, president of consultant Autoconomy LLC in Grand Rapids, Mich. “As we're coming out, they've got all this new product coming out in just about every category.”
First-quarter revenue rose 15 percent to $28.1 billion. That compared with the $28 billion average estimate among seven analysts. Net income was 50 cents a share, exceeding the average estimate of 29 cents from two analysts, and compared with a net loss of $1.43 billion, or 60 cents, a year earlier.
2010 outlook
Revising Mulally's previous forecast of being “solidly profitable” in 2011, Ford said today it “now expects to deliver solid profits this year, with positive automotive operating-related cash flow.” Booth said 2010 earnings will exceed the first-quarter total, without giving a figure.
“Given where we were even three or four months ago, this says to you that we're really encouraged by the start we had” to the year, Booth told analysts.
Ford reported $25.3 billion in automotive cash on March 31, up from $24.9 billion at the end of 2009, which the automaker restated from $25.5 billion because of an accounting change.
Cash consumption was $100 million during 2010's first three months, after the company used $3.7 billion a year earlier. Booth said Ford will have positive cash flow for all of 2010.
Borrowing $23 billion in late 2006 gave Ford a cash cushion to withstand losses and develop new models such as the Fiesta. The trade-off was a debt load that Mulally has said puts Ford at a competitive disadvantage with General Motors Co. and Chrysler Group LLC, which had their obligations cut in bankruptcy.
Automotive debt was $34.3 billion, up from $33.6 billion at the end of 2009, which was adjusted from $34.3 billion due to an accounting change, Ford said. That doesn't include a $3 billion payment Ford made on its revolving line of credit on April 6.
Redesigned models such as the Taurus sedan helped boost U.S. market share through March to 17.4 percent from 14.7 percent a year earlier, the biggest jump since 1977, Ford has said. Ford has said it is attracting buyers from Toyota Motor Corp. after global recalls of more than 8 million vehicles.
Mulally, 64, also completed his push to unload Ford's European luxury brands by reaching an agreement in March to sell Volvo to China's Zhejiang Geely Holding Co. That transaction should close in the third quarter, Ford said today.
Today's earnings report came with a plan to boost second-quarter production and spurred CEO Alan Mulally to forecast a “solid” 2010 profit, a year ahead of his previous prediction. Future quarters may not be as strong, CFO Lewis Booth said today.
“It would be unwise to think of $2 billion as a running rate,” Booth told reporters. “We've got a lot of new product launches, so you'll see some launch expense and we do expect some headwinds from commodities” prices.
The executives cited challenges such as a “fragile” economy after posting a fourth straight quarter of net income, the longest streak since 2005. Booth said the Ford Motor Credit unit was unlikely to “keep up the pace” for the rest of the year.
“The first quarter could turn out to be their best,” said Joe Phillippi, president of AutoTrends Consulting in Short Hills, New Jersey. “The landscape might become more competitive as Toyota fights its way back and GM launches a lot of new products.”
Ford said second-quarter production in North America will be 625,000 vehicles, a 5 percent increase from the plan announced March 2. Output will rise 39 percent compared with a year earlier.
Ford benefited from a recovering auto market and higher prices that added $1 billion to pretax operating earnings. Excluding some gains and costs, earnings were 46 cents a share, topping the 31-cent average of 12 estimates compiled by Bloomberg.
Market share
A 37 percent surge in U.S. sales in the first quarter more than doubled the industrywide increase, helping Ford add domestic market share at the fastest pace in 33 years after becoming the only major U.S. automaker to avoid bankruptcy in 2009.
Profit was buoyed by Ford Credit's $828 million of pretax operating income, after a $36 million year-earlier loss. Ford Credit, which lends to dealers and buyers, will earn about $2 billion on an operating basis in 2010, Ford said. The unit will pay Ford a dividend of $2 billion this year, up from a previous forecast of $1.5 billion, Booth said.
Himanshu Patel, a JPMorgan Chase & Co. analyst in New York, said in a note that the unit's first-quarter gains were driven by rising resale prices and are “unsustainable.” He advises holding Ford shares.
Ford shares slid 6.3 percent, to $13.55, at 4:02 p.m. in New York Stock Exchange composite trading. The stock tumbled as much as 9.1 percent earlier in the day, the most since May 12, after almost tripling in the 12 months through yesterday.
Regional results
In North America, Ford had a pretax operating profit of $1.2 billion, following a $665 million loss in the first three months of 2009. Revenue climbed 41 percent to $14.1 billion.
Ford also posted better results in all regions outside North America.
• Ford South America reported operating profit of $203 million versus $63 million a year ago. Higher costs prevented even higher profits, the company said. First quarter revenue was $2 billion, up from $1.4 billion.
• Ford Europe posted a profit versus a loss last year. The unit enjoyed higher sales, lower costs and higher parts profit. First-quarter operating profits were $107 million, compared with a loss of $585 million a year ago. Revenue jumped to $7.7 billion versus $5.8 billion.
• Ford Asia Pacific Africa also erased a loss last year. The region posted operating profit of $23 million, compared with a loss of $97 million a year ago. Higher sales in China boosted results.
Factory conversions
Some factories will close temporarily in the second half while being converted to build a new version of the Focus compact car, Booth said. Ford's price gains will “deteriorate” with the debut of the Focus and the Fiesta small cars this year because those models are less expensive, he said.
The Fusion sedan, F-150 pickup and Fusion drove first-quarter U.S. sales increases, Booth said.
“The most important thing Ford has done is invest heavily in new product during this down cycle,” said Erich Merkle, president of consultant Autoconomy LLC in Grand Rapids, Mich. “As we're coming out, they've got all this new product coming out in just about every category.”
First-quarter revenue rose 15 percent to $28.1 billion. That compared with the $28 billion average estimate among seven analysts. Net income was 50 cents a share, exceeding the average estimate of 29 cents from two analysts, and compared with a net loss of $1.43 billion, or 60 cents, a year earlier.
2010 outlook
Revising Mulally's previous forecast of being “solidly profitable” in 2011, Ford said today it “now expects to deliver solid profits this year, with positive automotive operating-related cash flow.” Booth said 2010 earnings will exceed the first-quarter total, without giving a figure.
“Given where we were even three or four months ago, this says to you that we're really encouraged by the start we had” to the year, Booth told analysts.
Ford reported $25.3 billion in automotive cash on March 31, up from $24.9 billion at the end of 2009, which the automaker restated from $25.5 billion because of an accounting change.
Cash consumption was $100 million during 2010's first three months, after the company used $3.7 billion a year earlier. Booth said Ford will have positive cash flow for all of 2010.
Borrowing $23 billion in late 2006 gave Ford a cash cushion to withstand losses and develop new models such as the Fiesta. The trade-off was a debt load that Mulally has said puts Ford at a competitive disadvantage with General Motors Co. and Chrysler Group LLC, which had their obligations cut in bankruptcy.
Automotive debt was $34.3 billion, up from $33.6 billion at the end of 2009, which was adjusted from $34.3 billion due to an accounting change, Ford said. That doesn't include a $3 billion payment Ford made on its revolving line of credit on April 6.
Redesigned models such as the Taurus sedan helped boost U.S. market share through March to 17.4 percent from 14.7 percent a year earlier, the biggest jump since 1977, Ford has said. Ford has said it is attracting buyers from Toyota Motor Corp. after global recalls of more than 8 million vehicles.
Mulally, 64, also completed his push to unload Ford's European luxury brands by reaching an agreement in March to sell Volvo to China's Zhejiang Geely Holding Co. That transaction should close in the third quarter, Ford said today.
Friday, April 23, 2010
Chrysler and U.S. market to play key role in Alfa relaunch
Fiat S.p.A. CEO Sergio Marchionne made a strong commitment to the money-losing sporty brand, which will be 100 years old in June, during a presentation of Fiat's five-year strategy Wednesday.
Marchionne announced the launch of seven new Alfa models between 2010 and 2014 and said Fiat is determined to transform the brand into a "full-line premium carmaker."
Marchionne also said North America will account for 85,000 unit sales in 2014 out of 500,000 that Alfa aims to sell in that year.
The Chrysler-built vehicles for Alfa will be:
• A compact SUV based on the Compact architecture that underpins the Giulietta hatchback in Europe. Production will begin in 2012
• A large SUV, similar in size to the next Jeep Liberty, which is sold as the Cherokee in Europe. Production will start in 2014.
The crossover models will be built in two of the three U.S. plants that Chrysler Group plans to retool for new Chrysler, Dodge and Jeep models based on Fiat-Chrysler's Compact Wide architecture.
Alfa will also sell a mid-sized sedan and station wagon when in the U.S. starting in late 2012. These two vehicles will have the name Giulia and in Europe will replace the 159 range. They will be built in Italy.
Alfa will also sell in the U.S. a five-door version of its MiTo minicar, which is currently sold in Europe as a three-door. The five-door MiTo will be sold in Europe and North America starting in 2013.
Alfa will launch the Giulietta in North America after the car gets a face-lift in 2014. The Giulietta launches in May in Europe.
Alfa will continue to build the Mito and Giulietta in Italy.
Chrysler to build Alfa spider
Marchionne also said Chrysler will provide the platform for a new Alfa spider model, planned for 2013, but said the production location has not been decided.
Fiat's plan for Alfa to sell 500,000 cars in 2014 is five times more than Alfa sold last year.
Starved of fresh product as Fiat delayed key new models, Alfa sales have declined steeply as its lineup became older. This year's volume expected to be 120,000 units, compared with a peak of 207,000 in 2001. Alfa has lost between 200 million and 400 million euros ($288 million to $566 million) a year in the past 10 years, according to company sources.
Alfa quit the North American market in 1995 after the quality of the brand's cars was condemned in studies and its sales plummeted.
Tuesday, April 20, 2010
GM agrees deal with unions to close Opel plant in Belgium
Compensation package removes key hurdle in Opel/Vauxhall revamp
General Motors Co.'s Opel/Vauxhall unit has agreed a deal with unions to close a plant in Antwerp, Belgium.
GM had announced in January that it would close the 120,000-unit capacity plant as part of a restructuring to reduce European capacity by a fifth to help return Opel to profitability within two years.
Opel unions, which had opposed the closure, on Sunday agreed a compensation package for the 2,560 Antwerp workers, a plant spokeswoman told the German press agency, Deutsche Presse-Agentur.
Workers will vote on Tuesday whether to accept the deal, which offers workers up to 144,000 euros ($193,000) in compensation for losing their jobs.
GM will still look for an outside investor to take over the plant and continue building the Astra three-door hatchback and Astra convertible. If no investor is found by September 30, the factory will close by the end of the year.
Klaus, Franz, Opel's top union leader, told the press agency that an important roadblock hindering labor's acceptance of GM's European restructuring will be removed if Antwerp workers vote to accept the deal.
GM plans to cut 8,300 of Opel/Vauxhall's 48,000 workforce and is seeking up to 2 billion in loan guarantees from five European governments toward its turnaround plan for Opel and its UK sister brand Vauxhall.
The British government has already pledged 300 million. Germany, where Opel and most of its workers are based, is being asked for the largest amount at 1.3 billion euros and has still to make a decision on whether to lend aid.
General Motors Co.'s Opel/Vauxhall unit has agreed a deal with unions to close a plant in Antwerp, Belgium.
GM had announced in January that it would close the 120,000-unit capacity plant as part of a restructuring to reduce European capacity by a fifth to help return Opel to profitability within two years.
Opel unions, which had opposed the closure, on Sunday agreed a compensation package for the 2,560 Antwerp workers, a plant spokeswoman told the German press agency, Deutsche Presse-Agentur.
Workers will vote on Tuesday whether to accept the deal, which offers workers up to 144,000 euros ($193,000) in compensation for losing their jobs.
GM will still look for an outside investor to take over the plant and continue building the Astra three-door hatchback and Astra convertible. If no investor is found by September 30, the factory will close by the end of the year.
Klaus, Franz, Opel's top union leader, told the press agency that an important roadblock hindering labor's acceptance of GM's European restructuring will be removed if Antwerp workers vote to accept the deal.
GM plans to cut 8,300 of Opel/Vauxhall's 48,000 workforce and is seeking up to 2 billion in loan guarantees from five European governments toward its turnaround plan for Opel and its UK sister brand Vauxhall.
The British government has already pledged 300 million. Germany, where Opel and most of its workers are based, is being asked for the largest amount at 1.3 billion euros and has still to make a decision on whether to lend aid.
Sunday, April 18, 2010
Daimler targets sales at double industry growth rate
Daimler AG, the maker of Mercedes-Benz cars and trucks, aims to increase deliveries twice as fast as this year's worldwide auto-market growth rate as the latest models of the E-class and S-class sedans attract buyers.
“Our global sales target for the year is ambitious but realistic,” CEO Dieter Zetsche said today at the annual shareholders meeting in Berlin. The sales gain includes a projected 50 percent jump in sales of the E class, including sedan, station wagon, coupe, and convertible versions.
Carmakers' deliveries will increase 3 percent to 4 percent this year, Daimler said in February. The Stuttgart, Germany- based manufacturer is seeking to close the gap with luxury-car market leader BMW AG while fending off efforts by Volkswagen AG's Audi division to become the world's biggest high-end automaker by 2015. Zetsche didn't specify Daimler's car-sales target for this year.
Daimler is targeting earnings before interest and taxes of at least 2.3 billion euros ($3.1 billion) this year after an Ebit loss of 1.51 billion euros in 2009. The manufacturer stuck to a forecast today that revenue in 2010 will exceed last year's 78.9 billion euros but be “significantly” below the 98.5 billion euros of 2008.
The global economy is “too fragile” to allow Daimler to commit to a timeframe for raising the automaking division's Ebit as a proportion of sales to 9 percent, Zetsche said. Munich-based BMW reaffirmed a target last month of achieving an Ebit margin in carmaking of at least 8 percent by 2012.
Sales at the Mercedes-Benz Cars division, which includes the Smart minicar and Maybach luxury nameplates, rose 11 percent to 271,200 vehicles in the first quarter, the company said on April 6. Including deliveries to dealers, Mercedes-Benz brand sales jumped by almost 27 percent in the period, boosted by a surge of more than two-thirds for the top-of-the-line S-Class, Daimler said today.
Daimler rose as much as 52 cents, or 1.4 percent, to 36.52 euros, the highest intraday price since Jan. 20, and was up 1.2 percent as of 1:59 p.m. in Frankfurt trading. The stock has declined 2.1 percent this year.
The company is also the world's largest truckmaker with Freightliner vehicles in the U.S. and Fuso models in Asia. Daimler said first-quarter truck sales rose 8 percent and orders nearly doubled, even as markets remain “weak.” Bus sales increased 23 percent in the first three months of 2010, and van deliveries jumped 62 percent, Zetsche said.
Reacting to rising international tensions with Iran over the country's nuclear research, Daimler said today that it's abandoning a 30 percent stake in a diesel-engine venture with Iran Khodro Co. Daimler also withdrew an application with the German government to export three-axle trucks to Iran and will halt delivery of such vehicles indefinitely.
“The policies of the current Iranian leadership have compelled us to put our business relationship with that country on a new footing,” Zetsche told about 5,000 shareholders. “Our business activities with Iran will now be limited to meeting our existing contractual obligations and continuing our cooperation with established customers.”
Cooperation With Renault
The manufacturer, seeking to expand its line-up of small cars while holding back costs, announced plans a week ago to cooperate with the Renault-Nissan alliance on developing compact Mercedes-Benz and Smart vehicles. A new line of Smart city cars, including two- and four-seat versions, will share a platform with Renault SA's Twingo. The French partner will supply 3- and 4-cylinder gasoline and diesel engines for Mercedes-Benz cars.
The cooperation represents “a decisive strategic step” that will help Smart enhance its position as a “young” brand, Zetsche said. While the project will help Mercedes-Benz hold back the expense of introducing smaller models, the brand “will not tolerate any compromises to our claim ‘the best or nothing,'” Zetsche added.
Working with Renault and Nissan Motor Co. may not bring the benefits that Daimler is planning, Ingo Speich, a Frankfurt- based fund manager with Union Investment, said at the meeting.
“We have grave doubts that the new partnership will be a success,” Speich said. “The traces of missteps run like a red thread through Daimler's cooperation history.”
After losing ground to Munich-based BMW in reducing vehicle emissions, Daimler aims to almost double annual spending to develop batteries and fuel-saving engines, to 1 billion euros in the next two years from an average 567 million euros in the past three years, Thomas Weber, the company's development chief, said on March 3.
Electric-car projects
The German company plans to develop an electric car for China with BYD Co., the Shenzhen-based automaker backed by billionaire Warren Buffett. It's also building a factory in eastern Germany to produce lithium-ion batteries by 2012 and has taken a stake in Tesla Motors Inc., the Palo Alto, California- based manufacturer of electric sports cars.
“Daimler aims to be, and will be, a pioneer in the field of electric mobility” as the car industry phases out oil-based powering systems, Zetsche said. “When alternative drive systems go into mass production in a few years, we will be ahead of the competition.”
A net loss of 2.64 billion euros last year because of the global car-market contraction prompted Daimler to cancel its dividend for the first time since at least 1999. Daimler posted the loss, its first for a full year since 2001, even after reducing spending by 5.3 billion euros by building fewer vehicles and cutting pay in response to the recession.
Daimler reiterated that it plans to resume dividend payments after returning to profit this year.
“Our global sales target for the year is ambitious but realistic,” CEO Dieter Zetsche said today at the annual shareholders meeting in Berlin. The sales gain includes a projected 50 percent jump in sales of the E class, including sedan, station wagon, coupe, and convertible versions.
Carmakers' deliveries will increase 3 percent to 4 percent this year, Daimler said in February. The Stuttgart, Germany- based manufacturer is seeking to close the gap with luxury-car market leader BMW AG while fending off efforts by Volkswagen AG's Audi division to become the world's biggest high-end automaker by 2015. Zetsche didn't specify Daimler's car-sales target for this year.
Daimler is targeting earnings before interest and taxes of at least 2.3 billion euros ($3.1 billion) this year after an Ebit loss of 1.51 billion euros in 2009. The manufacturer stuck to a forecast today that revenue in 2010 will exceed last year's 78.9 billion euros but be “significantly” below the 98.5 billion euros of 2008.
The global economy is “too fragile” to allow Daimler to commit to a timeframe for raising the automaking division's Ebit as a proportion of sales to 9 percent, Zetsche said. Munich-based BMW reaffirmed a target last month of achieving an Ebit margin in carmaking of at least 8 percent by 2012.
Sales at the Mercedes-Benz Cars division, which includes the Smart minicar and Maybach luxury nameplates, rose 11 percent to 271,200 vehicles in the first quarter, the company said on April 6. Including deliveries to dealers, Mercedes-Benz brand sales jumped by almost 27 percent in the period, boosted by a surge of more than two-thirds for the top-of-the-line S-Class, Daimler said today.
Daimler rose as much as 52 cents, or 1.4 percent, to 36.52 euros, the highest intraday price since Jan. 20, and was up 1.2 percent as of 1:59 p.m. in Frankfurt trading. The stock has declined 2.1 percent this year.
The company is also the world's largest truckmaker with Freightliner vehicles in the U.S. and Fuso models in Asia. Daimler said first-quarter truck sales rose 8 percent and orders nearly doubled, even as markets remain “weak.” Bus sales increased 23 percent in the first three months of 2010, and van deliveries jumped 62 percent, Zetsche said.
Reacting to rising international tensions with Iran over the country's nuclear research, Daimler said today that it's abandoning a 30 percent stake in a diesel-engine venture with Iran Khodro Co. Daimler also withdrew an application with the German government to export three-axle trucks to Iran and will halt delivery of such vehicles indefinitely.
“The policies of the current Iranian leadership have compelled us to put our business relationship with that country on a new footing,” Zetsche told about 5,000 shareholders. “Our business activities with Iran will now be limited to meeting our existing contractual obligations and continuing our cooperation with established customers.”
Cooperation With Renault
The manufacturer, seeking to expand its line-up of small cars while holding back costs, announced plans a week ago to cooperate with the Renault-Nissan alliance on developing compact Mercedes-Benz and Smart vehicles. A new line of Smart city cars, including two- and four-seat versions, will share a platform with Renault SA's Twingo. The French partner will supply 3- and 4-cylinder gasoline and diesel engines for Mercedes-Benz cars.
The cooperation represents “a decisive strategic step” that will help Smart enhance its position as a “young” brand, Zetsche said. While the project will help Mercedes-Benz hold back the expense of introducing smaller models, the brand “will not tolerate any compromises to our claim ‘the best or nothing,'” Zetsche added.
Working with Renault and Nissan Motor Co. may not bring the benefits that Daimler is planning, Ingo Speich, a Frankfurt- based fund manager with Union Investment, said at the meeting.
“We have grave doubts that the new partnership will be a success,” Speich said. “The traces of missteps run like a red thread through Daimler's cooperation history.”
After losing ground to Munich-based BMW in reducing vehicle emissions, Daimler aims to almost double annual spending to develop batteries and fuel-saving engines, to 1 billion euros in the next two years from an average 567 million euros in the past three years, Thomas Weber, the company's development chief, said on March 3.
Electric-car projects
The German company plans to develop an electric car for China with BYD Co., the Shenzhen-based automaker backed by billionaire Warren Buffett. It's also building a factory in eastern Germany to produce lithium-ion batteries by 2012 and has taken a stake in Tesla Motors Inc., the Palo Alto, California- based manufacturer of electric sports cars.
“Daimler aims to be, and will be, a pioneer in the field of electric mobility” as the car industry phases out oil-based powering systems, Zetsche said. “When alternative drive systems go into mass production in a few years, we will be ahead of the competition.”
A net loss of 2.64 billion euros last year because of the global car-market contraction prompted Daimler to cancel its dividend for the first time since at least 1999. Daimler posted the loss, its first for a full year since 2001, even after reducing spending by 5.3 billion euros by building fewer vehicles and cutting pay in response to the recession.
Daimler reiterated that it plans to resume dividend payments after returning to profit this year.
Friday, April 16, 2010
THE TOYOTA RECALL CRISIS - U.S. auto safety regulators to test Lexus SUV
U.S. regulators will run safety tests on a new Lexus SUV and take action if the Toyota Motor Corp. vehicle does not meet government standards, the top U.S. auto safety official said today.
The National Highway Traffic Safety Administration said it had received a preliminary report from Consumer Reports before the influential magazine issued a public warning on Tuesday calling the 2010 Lexus GX 460 a "safety risk" and warning against buying the vehicle.
"My compliance staff is going to take a look at several of these vehicles including the test vehicle that was used at Consumer Reports," NHTSA chief David Strickland told reporters on the sidelines of the SAE International 2010 World Congress in Detroit.
In the latest blow to Toyota's reputation, the automaker halted sales of its Lexus GX 460 luxury SUV in the United States on Tuesday after Consumer Reports said the electronic stability control system kicked in late on a sharp curve and gave the vehicle a "non-acceptable" rating.
Toyota has extended the sales suspension on the Lexus GX 460 to other global markets and said earlier today it would conduct safety tests on all of its SUVs. Strickland said NHTSA would use its electronic stability control testing framework to see if the Lexus SUV meets those standards.
Mounting criticism
The automaker has faced stiff criticism from U.S. lawmakers and safety advocates for its handling of massive recalls for defective accelerator pedals in January that prompted an unprecedented suspension of sales and production.
Safety regulators also have sought to impose a record $16.4 million fine against Toyota, accusing the automaker of delays in conducting the recall on sticky accelerator pedals. They are also considering other fines.
Strickland said NHTSA expected a response very soon from Toyota about the proposed fine. Toyota has until Monday to challenge that initial fine, the maximum allowed by U.S. law and the largest that the regulator has ever sought.
He said Toyota "took the proactive step" on the Lexus GX 460, a swift response he hopes other automakers will make.
'More responsive'
He said that since he became administrator in January, "Toyota has definitely been more responsive. The career staff has noted that there has been a change about their level of responsiveness."
NHTSA is looking at several rule changes industrywide to improve vehicle safety, including the possibility of making "black boxes" that can capture data on speed, braking and other details mandatory on all new vehicles.
Other potential changes might address start/stop push button controls, braking systems that take priority over the accelerator and creating a pedal that cannot be entrapped by floormats, all thought to be factors in recent crashes.
The National Highway Traffic Safety Administration said it had received a preliminary report from Consumer Reports before the influential magazine issued a public warning on Tuesday calling the 2010 Lexus GX 460 a "safety risk" and warning against buying the vehicle.
"My compliance staff is going to take a look at several of these vehicles including the test vehicle that was used at Consumer Reports," NHTSA chief David Strickland told reporters on the sidelines of the SAE International 2010 World Congress in Detroit.
In the latest blow to Toyota's reputation, the automaker halted sales of its Lexus GX 460 luxury SUV in the United States on Tuesday after Consumer Reports said the electronic stability control system kicked in late on a sharp curve and gave the vehicle a "non-acceptable" rating.
Toyota has extended the sales suspension on the Lexus GX 460 to other global markets and said earlier today it would conduct safety tests on all of its SUVs. Strickland said NHTSA would use its electronic stability control testing framework to see if the Lexus SUV meets those standards.
Mounting criticism
The automaker has faced stiff criticism from U.S. lawmakers and safety advocates for its handling of massive recalls for defective accelerator pedals in January that prompted an unprecedented suspension of sales and production.
Safety regulators also have sought to impose a record $16.4 million fine against Toyota, accusing the automaker of delays in conducting the recall on sticky accelerator pedals. They are also considering other fines.
Strickland said NHTSA expected a response very soon from Toyota about the proposed fine. Toyota has until Monday to challenge that initial fine, the maximum allowed by U.S. law and the largest that the regulator has ever sought.
He said Toyota "took the proactive step" on the Lexus GX 460, a swift response he hopes other automakers will make.
'More responsive'
He said that since he became administrator in January, "Toyota has definitely been more responsive. The career staff has noted that there has been a change about their level of responsiveness."
NHTSA is looking at several rule changes industrywide to improve vehicle safety, including the possibility of making "black boxes" that can capture data on speed, braking and other details mandatory on all new vehicles.
Other potential changes might address start/stop push button controls, braking systems that take priority over the accelerator and creating a pedal that cannot be entrapped by floormats, all thought to be factors in recent crashes.
Tuesday, April 13, 2010
GM to report 'solid' Q1 operating results, Whitacre memo says
General Motors Co. expects to report "solid" operating results for the first quarter, which will show progress toward its goal of returning to profitability in 2010, CEO Ed Whitacre said.
A potential profit this year would end a five-year streak of losses and mark a turnaround for the U.S. automaker, which emerged from a U.S. government-financed bankruptcy in July after slashing debt and labor costs.
Whitacre, who replaced Fritz Henderson as CEO in December, has aimed to move faster to jump-start sales and launch an initial public offering that would allow the U.S. government to reduce its majority stake in GM.
"In January, I said we could earn a profit in 2010, if everything falls into place," Whitacre said in a memo to staff, which was obtained by Reuters.
"Our first quarter financial results will show us an important milestone, and I'm pleased to say that I anticipate solid operating results when we report our first quarter financials in May," he said.
The automaker has said it will report its first-quarter results in mid-May.
Last week, GM reported a $4.3 billion 2009 net loss covering the period from its emergence from bankruptcy in July through the end of the year, in the automaker's first full account of its new balance sheet as a restructured company.
"Our 'fresh start' accounting not only closed the door on 2009, it is a major milestone in our journey to becoming a public company again," Whitacre said in the memo.
Hit by losses of about $88 billion from 2005 through the first quarter of 2009, GM was given $50 billion of government financing to restructure in a bankruptcy steered by the U.S. Treasury, which remains a 61 percent owner of GM.
As part of efforts to push for a faster turnaround, Whitacre has shaken up senior management, including sales and marketing teams, in recent months.
GM reshuffled its sales organization in March, putting North American President Mark Reuss in charge of sales; and GM executives have said Whitacre has been clear he will hold them responsible for delivering on a promised turnaround.
The bankruptcy restructuring helped the “new GM” eliminate debt and build its cash, but the automaker's sales overall remain under pressure as it eliminates four unprofitable brands: Pontiac, Saturn, Hummer and Saab.
The automaker's U.S. sales were up 16 percent in the first quarter from a year earlier, when the industry was hitting its lowest levels since the early 1980s and GM was sliding toward bankruptcy.
But GM's U.S. market share of 18.7 percent in the first quarter was down from 19.6 percent for all of 2009, a year in which it lost 2.5 percentage points of U.S. share.
A potential profit this year would end a five-year streak of losses and mark a turnaround for the U.S. automaker, which emerged from a U.S. government-financed bankruptcy in July after slashing debt and labor costs.
Whitacre, who replaced Fritz Henderson as CEO in December, has aimed to move faster to jump-start sales and launch an initial public offering that would allow the U.S. government to reduce its majority stake in GM.
"In January, I said we could earn a profit in 2010, if everything falls into place," Whitacre said in a memo to staff, which was obtained by Reuters.
"Our first quarter financial results will show us an important milestone, and I'm pleased to say that I anticipate solid operating results when we report our first quarter financials in May," he said.
The automaker has said it will report its first-quarter results in mid-May.
Last week, GM reported a $4.3 billion 2009 net loss covering the period from its emergence from bankruptcy in July through the end of the year, in the automaker's first full account of its new balance sheet as a restructured company.
"Our 'fresh start' accounting not only closed the door on 2009, it is a major milestone in our journey to becoming a public company again," Whitacre said in the memo.
Hit by losses of about $88 billion from 2005 through the first quarter of 2009, GM was given $50 billion of government financing to restructure in a bankruptcy steered by the U.S. Treasury, which remains a 61 percent owner of GM.
As part of efforts to push for a faster turnaround, Whitacre has shaken up senior management, including sales and marketing teams, in recent months.
GM reshuffled its sales organization in March, putting North American President Mark Reuss in charge of sales; and GM executives have said Whitacre has been clear he will hold them responsible for delivering on a promised turnaround.
The bankruptcy restructuring helped the “new GM” eliminate debt and build its cash, but the automaker's sales overall remain under pressure as it eliminates four unprofitable brands: Pontiac, Saturn, Hummer and Saab.
The automaker's U.S. sales were up 16 percent in the first quarter from a year earlier, when the industry was hitting its lowest levels since the early 1980s and GM was sliding toward bankruptcy.
But GM's U.S. market share of 18.7 percent in the first quarter was down from 19.6 percent for all of 2009, a year in which it lost 2.5 percentage points of U.S. share.
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