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.
Tuesday, April 20, 2010
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.
Wednesday, April 14, 2010
Toyota’s cash-cow Lexus brand may be tarnished on ‘safety risk’
Toyota Motor Corp., struggling to recover from record recalls, may not be able to count on its luxury Lexus brand to bolster earnings after Consumer Reports called the GX 460 sport-utility model a “safety risk.”
The designation, accompanied by a “don’t buy” recommendation from the U.S. magazine, may dampen Lexus sales in the nation, which have risen even as Toyota’s overall deliveries fell amid global recalls of more than 8 million vehicles.
“No one is going to purchase a car that has a ‘don’t buy’ rating,” said Koji Endo, managing director of Tokyo-based Advanced Research Japan. “Worse yet, this will deal a severe blow to the image of the entire Lexus lineup.”
Until now, the Lexus brand was largely unscathed by Toyota’s recalls, which have led to U.S. congressional hearings, a rebuke by Transportation Secretary Ray LaHood, and a proposed $16.4 million fine.
While some Lexus models were called back because of floor mats that might trap gas pedals and cause unintended acceleration, none were involved in later actions to fix sticky accelerators.
Lexus sales in the U.S. jumped 18 percent in the first quarter of this year and accounted for 13 percent of Toyota’s total deliveries in the country. Toyota’s most expensive Lexus models earn at least 10 times the operating profit per vehicle of a Toyota Corolla compact car, according to Advanced Research’s Endo.
Rollover Accidents
Consumer Reports, a non-profit magazine published by New York-based Consumers Union, said Monday that emergency driving tests indicated the 2010 GX 460 model may be prone to rolling over.
The GX’s rear end “slid out until the vehicle was almost sideways before the electronic stability control system was able to regain control” at a Connecticut test track, the magazine said. “In real-world driving, that situation could lead to a rollover accident, which could cause serious injury or death.”
The Lexus division has been the top seller of luxury vehicles in the U.S. on an annual basis for 10 years in a row. The brand tied with General Motors Co.’s Cadillac for the top ranking in a University of Michigan survey of customer satisfaction, the school said in August.
Lexus cars will have the highest average U.S. resale value among 2010 model-year vehicles in five years, according to a study released by Kelley Blue Book in December.
Profitability Pressured
“Buyers who see the Consumer Reports rating may perceive this as a problem across all Lexus models,” said Tadashi Usui, an analyst at Moody’s K.K. in Tokyo. “In that case, because of Lexus’s high margins, we’ll see an impact more on profit than on sales.”
Toyota’s profitability is already being pressured by the cost of incentives the carmaker has introduced to bolster U.S. deliveries. Toyota started offering no-interest loans, discount leases, and free maintenance for some models from March, helping the carmaker raise sales that month by 41 percent from a year earlier. Toyota is extending the offers until May 3.
“These free maintenance offers and such are not adding to Toyota’s bottom line,” said Takashi Aoki, who helps manage about $1 billion at Mizuho Asset Management Co. in Tokyo, including Toyota shares. “And what will happen when the incentive program ends?”
Lawsuits
Toyota is facing at least 177 consumer and shareholder lawsuits seeking class-action status and at least 57 individual suits claiming personal injuries or deaths caused by unintended acceleration incidents. The lawsuits will be combined in a federal court in Santa Ana, Calif., a panel of judges said earlier this month.
The uncertainty surrounding the legal cases will push Toyota to be especially cautious with its dividend payments and profit forecast for the fiscal year started April 1, said Yuuki Sakurai, CEO of Fukoku Capital Management in Tokyo, which manages about $7.5 billion.
“Raising the dividend is out of the question,” Sakurai said. “That would actually upset investors who think it wouldn’t be prudent.”
Toyota will announce its fiscal fourth-quarter and annual earnings results on May 11 in Tokyo.
The designation, accompanied by a “don’t buy” recommendation from the U.S. magazine, may dampen Lexus sales in the nation, which have risen even as Toyota’s overall deliveries fell amid global recalls of more than 8 million vehicles.
“No one is going to purchase a car that has a ‘don’t buy’ rating,” said Koji Endo, managing director of Tokyo-based Advanced Research Japan. “Worse yet, this will deal a severe blow to the image of the entire Lexus lineup.”
Until now, the Lexus brand was largely unscathed by Toyota’s recalls, which have led to U.S. congressional hearings, a rebuke by Transportation Secretary Ray LaHood, and a proposed $16.4 million fine.
While some Lexus models were called back because of floor mats that might trap gas pedals and cause unintended acceleration, none were involved in later actions to fix sticky accelerators.
Lexus sales in the U.S. jumped 18 percent in the first quarter of this year and accounted for 13 percent of Toyota’s total deliveries in the country. Toyota’s most expensive Lexus models earn at least 10 times the operating profit per vehicle of a Toyota Corolla compact car, according to Advanced Research’s Endo.
Rollover Accidents
Consumer Reports, a non-profit magazine published by New York-based Consumers Union, said Monday that emergency driving tests indicated the 2010 GX 460 model may be prone to rolling over.
The GX’s rear end “slid out until the vehicle was almost sideways before the electronic stability control system was able to regain control” at a Connecticut test track, the magazine said. “In real-world driving, that situation could lead to a rollover accident, which could cause serious injury or death.”
The Lexus division has been the top seller of luxury vehicles in the U.S. on an annual basis for 10 years in a row. The brand tied with General Motors Co.’s Cadillac for the top ranking in a University of Michigan survey of customer satisfaction, the school said in August.
Lexus cars will have the highest average U.S. resale value among 2010 model-year vehicles in five years, according to a study released by Kelley Blue Book in December.
Profitability Pressured
“Buyers who see the Consumer Reports rating may perceive this as a problem across all Lexus models,” said Tadashi Usui, an analyst at Moody’s K.K. in Tokyo. “In that case, because of Lexus’s high margins, we’ll see an impact more on profit than on sales.”
Toyota’s profitability is already being pressured by the cost of incentives the carmaker has introduced to bolster U.S. deliveries. Toyota started offering no-interest loans, discount leases, and free maintenance for some models from March, helping the carmaker raise sales that month by 41 percent from a year earlier. Toyota is extending the offers until May 3.
“These free maintenance offers and such are not adding to Toyota’s bottom line,” said Takashi Aoki, who helps manage about $1 billion at Mizuho Asset Management Co. in Tokyo, including Toyota shares. “And what will happen when the incentive program ends?”
Lawsuits
Toyota is facing at least 177 consumer and shareholder lawsuits seeking class-action status and at least 57 individual suits claiming personal injuries or deaths caused by unintended acceleration incidents. The lawsuits will be combined in a federal court in Santa Ana, Calif., a panel of judges said earlier this month.
The uncertainty surrounding the legal cases will push Toyota to be especially cautious with its dividend payments and profit forecast for the fiscal year started April 1, said Yuuki Sakurai, CEO of Fukoku Capital Management in Tokyo, which manages about $7.5 billion.
“Raising the dividend is out of the question,” Sakurai said. “That would actually upset investors who think it wouldn’t be prudent.”
Toyota will announce its fiscal fourth-quarter and annual earnings results on May 11 in Tokyo.
Tuesday, April 13, 2010
1990 celica car runs ok but has a problem
I just got the car it run but water came out by the engine not radiator,just put new radiator. I don't know if is the water pump.
Response:
Best thing to do......Barrow a Cooling System Pressure Tester from your local Parts Outlet. Pressurize the System without Starting the Engine and check where the leak is. HINT, your Radiator Cap tells you what Pressure your System should run. Also, pressurize the Cap as LOW Blow off Pressure raises Coolant Temp. Coupled with a Replacement Radiator and no History of it you may have a cracked Engine Block.
Response:
Best thing to do......Barrow a Cooling System Pressure Tester from your local Parts Outlet. Pressurize the System without Starting the Engine and check where the leak is. HINT, your Radiator Cap tells you what Pressure your System should run. Also, pressurize the Cap as LOW Blow off Pressure raises Coolant Temp. Coupled with a Replacement Radiator and no History of it you may have a cracked Engine Block.
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.
Saturday, April 10, 2010
1999 Chevy Tahoe running rough
Response:
First, check your Engine Codes. Then check your Compression as GM V series engines are known for dropping the last cylinder on the passenger side of the engine due to valve failure and sometimes No 1 cylinder. Also note that the V8 series has a problem with blown head gaskets on the passenger side.
Friday, April 09, 2010
Toyota executive Irv Miller urged automaker to ‘come clean'
WASHINGTON (Bloomberg) -- A Toyota Motor Corp. executive urged the Japanese automaker to “come clean” in January about mechanical failures in accelerator pedals for some vehicles, after other officials suggested a more cautious approach.
Irv Miller, then a vice president for communications at Toyota's U.S. sales unit, told other officials in an e-mail on Jan. 16 that “the time to hide on this one is over.” The world's largest automaker recalled 2.3 million vehicles in the United States for accelerator pedal flaws the following week.
“We are not protecting our customers by keeping this quiet,” Miller wrote in an e-mail to Toyota executives in the U.S. and Japan, obtained Wednesday.
Toyota faces a proposed fine of $16.4 million after the U.S. Department of Transportation said this week the company “knowingly hid a dangerous defect” that caused its vehicles to accelerate unexpectedly. The carmaker waited at least four months before it told U.S. regulators in January that gas pedals in its vehicles may stick, Transportation Secretary Ray LaHood said on April 5.
Miller, who retired from Toyota later in January, declined to comment when reached by phone Wednesday. His retirement was announced Dec. 16.
‘Poor job'
“While Toyota does not comment on internal company communications and cannot comment on Mr. Miller's e-mail, we have publicly acknowledged on several occasions that the company did a poor job of communicating during the period preceding our recent recalls,” Toyota's North American unit said Wednesday in a statement.
Toyota has recalled more than 8.5 million vehicles worldwide for flawed parts including accelerator pedals made by CTS Corp., based in Elkhart, Indiana, and floor mats that could jam and cause cars and trucks to accelerate unintentionally.
Miller and other communications staff discussed how the company should respond to a pending television report on unintended acceleration in Toyota vehicles.
Katsuhiko Koganei, a company communications official based in Torrance, Calif., had said in a message earlier that day that Toyota “should not mention” mechanical failures in gas pedals “because we have not clarified the real cause” and “the remedy for the matter has not been confirmed.”
Mike Michels, a spokesman for Toyota who was also mentioned in the e-mails, declined to elaborate on them. No one at the company advocated hiding or ignoring concerns about accelerator pedals, he said.
Irv Miller, then a vice president for communications at Toyota's U.S. sales unit, told other officials in an e-mail on Jan. 16 that “the time to hide on this one is over.” The world's largest automaker recalled 2.3 million vehicles in the United States for accelerator pedal flaws the following week.
“We are not protecting our customers by keeping this quiet,” Miller wrote in an e-mail to Toyota executives in the U.S. and Japan, obtained Wednesday.
Toyota faces a proposed fine of $16.4 million after the U.S. Department of Transportation said this week the company “knowingly hid a dangerous defect” that caused its vehicles to accelerate unexpectedly. The carmaker waited at least four months before it told U.S. regulators in January that gas pedals in its vehicles may stick, Transportation Secretary Ray LaHood said on April 5.
Miller, who retired from Toyota later in January, declined to comment when reached by phone Wednesday. His retirement was announced Dec. 16.
‘Poor job'
“While Toyota does not comment on internal company communications and cannot comment on Mr. Miller's e-mail, we have publicly acknowledged on several occasions that the company did a poor job of communicating during the period preceding our recent recalls,” Toyota's North American unit said Wednesday in a statement.
Toyota has recalled more than 8.5 million vehicles worldwide for flawed parts including accelerator pedals made by CTS Corp., based in Elkhart, Indiana, and floor mats that could jam and cause cars and trucks to accelerate unintentionally.
Miller and other communications staff discussed how the company should respond to a pending television report on unintended acceleration in Toyota vehicles.
Katsuhiko Koganei, a company communications official based in Torrance, Calif., had said in a message earlier that day that Toyota “should not mention” mechanical failures in gas pedals “because we have not clarified the real cause” and “the remedy for the matter has not been confirmed.”
Mike Michels, a spokesman for Toyota who was also mentioned in the e-mails, declined to elaborate on them. No one at the company advocated hiding or ignoring concerns about accelerator pedals, he said.
Thursday, April 08, 2010
Smart 4-seater for U.S. likely to come from alliance
A four-seat Smart car developed jointly by the Daimler-Renault-Nissan alliance is likely to be sold in the United States, said Daimler CEO Dieter Zetsche.
Zetsche said having a partner for developing a four-seat Smart “was a prerequisite” for expanding the microcar range. “We could not have found a feasible basis alone for the next-generation Smart family,” he said in a call with reporters today.
The next-generation SmartForTwo two-seater, a four-seat Smart and the next-generation Renault Twingo will be jointly developed by the partners. The agreement calls for electric versions of both the Smart and Twingo families as well as sharing and co-development of diesel and gasoline engines.
“Of course, we could do a next-generation Smart alone, but we would lose a lot of money,” said Zetsche, who noted that a final decision on a four-seater for the United States hasn't been made.
Daimler AG would also have had a hard time recouping the required 10 percent return-on-sales it requires for new vehicles by developing a second Smart on its own, he said.
Zetsche said Daimler has no intention of using Nissan dealers in the United States to sell Smart cars. The partnership announced today with Renault SA and Nissan Motor Co. will not affect the Smart distributorship agreement Daimler has with Penske Automotive Group, the sole distributor of Smart cars in the United States.
The SmartForTwo went on sale in the United States in 2008. A total of 24,622 were sold that year, exceeding Daimler's and Penske's expectations.
As gasoline prices fell from record highs and the economy collapsed, Smart sales plunged 41 percent in 2009. This year's demand is down 72 percent from year-earlier levels.
Tuesday, April 06, 2010
Toyota may face $16.4 million fine for hiding defect, U.S. says
WASHINGTON (Bloomberg) -- Toyota Motor Corp. “knowingly hid a dangerous defect” that caused its vehicles to accelerate unexpectedly, the U.S. said, for the first time accusing the world's largest automaker of breaking the law.
Transportation Secretary Ray LaHood proposed a record civil penalty of $16.4 million, the most the government can impose. The fine recommended Monday escalates the confrontation between Toyota and LaHood, who initially praised the carmaker for its handling of recalls the company attributed to faulty accelerator pedals.
The fine was announced the week after Toyota reported U.S. sales rose 41 percent in March with the help of no-interest loans and discount leases, signaling the company may be recovering from recalls of about more than 8 million vehicles worldwide for flaws that may cause unintended acceleration..
The Transportation Department's action showed “safety matters and they're going to be tough as nails,” Joan Claybrook, a former head of the National Highway Traffic Safety Administration, said in an interview. “That's very appropriate. They caught Toyota red-handed.”
The Japanese automaker waited at least four months before telling the agency that accelerator pedals might stick, LaHood said in a statement. Companies have five business days to report safety defects, the agency said.
`We now have proof'
“We now have proof that Toyota failed to live up to its legal obligations,” LaHood said in the statement. “Worse yet, they knowingly hid a dangerous defect for months from U.S. officials and did not take action to protect millions of drivers and their families.”
Toyota hadn't received NHTSA's letter on the fine, according to an e-mailed statement Monday from the company's North American sales unit.
“We have already taken a number of important steps to improve our communications with regulators and customers on safety-related matters as part of our strengthened overall commitment to quality assurance,” the company said, without saying whether it will exercise its right to dispute the fine.
LaHood has increasingly faulted Toyota's response since Jan. 28, when he said he had “no criticism” of the company and Toyota “did what they're supposed to do.”
Toyota in January recalled about 2.3 million U.S. cars and trucks for sticky accelerator pedals.
The penalty could “very possibly” be the first of multiple fines, said Claybrook, who is former president of Public Citizen, a Washington-based consumer advocacy group.
NHTSA cited documents obtained from Toyota in saying the company knew about the pedal defect since at least Sept. 29.
“NHTSA wants to make it clear that it was Toyota that was at fault and the agency did its best within the system,” said Alan Baum, an auto industry analyst at Baum & Associates in West Bloomfield, Michigan. He said Toyota probably won't contest the fine, “since they've essentially said they screwed up.”
‘Firepower to attorneys'
At a February congressional hearing, Toyota's U.S. sales chief Jim Lentz told lawmakers “we failed to promptly analyze and respond to information emerging from Europe and in the United States” about the sticky pedals.
Toyota has two weeks to accept or contest the proposed fine, Olivia Alair, a Transportation Department spokeswoman, said in an e-mail. If Toyota contests the penalty and a settlement isn't reached, “it would go to court,” she said.
“One of the biggest reasons to fight the fine would be to defend themselves from the language used by the Department of Transportation,” Ed Kim, an industry analyst for forecaster AutoPacific Inc. in Tustin, California, said in an interview. “That would seem to provide some firepower to attorneys that are suing the company.”
NHTSA's largest civil penalty was $1 million against General Motors in 2004 to settle charges that the company failed to conduct a timely recall involving windshield-wiper failures in about 581,000 vehicles.
‘Free Publicity'
“Both industry and government failed the test of putting the safety of America's drivers first” in the Toyota recalls, Representative Darrell Issa, the top Republican on the House Oversight and Government Reform Committee, one of three panels that has held hearings on Toyota actions, said in a statement Monday.
The proposed NHTSA fine may help consumers suing Toyota over sudden acceleration, said Houston attorney W. Mark Lanier, who has filed class-action and individual lawsuits related to the claims.
“Toyota is spending millions of dollars on public relations right now to sway consumers or a potential jury pool,” Lanier said in a phone interview. The fine “is free publicity that counters Toyota.” The penalty probably couldn't be introduced in court because “it's not like a criminal finding in that there was due process,” he said.
Toyota is facing at least 177 consumer and shareholder lawsuits seeking class-action status and at least 56 suits claiming personal injuries or deaths caused by sudden acceleration incidents, according to data compiled by Bloomberg. Lanier has filed two personal injury cases and is considering filing about 100 others, including a dozen involving deaths, he said.
Transportation Secretary Ray LaHood proposed a record civil penalty of $16.4 million, the most the government can impose. The fine recommended Monday escalates the confrontation between Toyota and LaHood, who initially praised the carmaker for its handling of recalls the company attributed to faulty accelerator pedals.
The fine was announced the week after Toyota reported U.S. sales rose 41 percent in March with the help of no-interest loans and discount leases, signaling the company may be recovering from recalls of about more than 8 million vehicles worldwide for flaws that may cause unintended acceleration..
The Transportation Department's action showed “safety matters and they're going to be tough as nails,” Joan Claybrook, a former head of the National Highway Traffic Safety Administration, said in an interview. “That's very appropriate. They caught Toyota red-handed.”
The Japanese automaker waited at least four months before telling the agency that accelerator pedals might stick, LaHood said in a statement. Companies have five business days to report safety defects, the agency said.
`We now have proof'
“We now have proof that Toyota failed to live up to its legal obligations,” LaHood said in the statement. “Worse yet, they knowingly hid a dangerous defect for months from U.S. officials and did not take action to protect millions of drivers and their families.”
Toyota hadn't received NHTSA's letter on the fine, according to an e-mailed statement Monday from the company's North American sales unit.
“We have already taken a number of important steps to improve our communications with regulators and customers on safety-related matters as part of our strengthened overall commitment to quality assurance,” the company said, without saying whether it will exercise its right to dispute the fine.
LaHood has increasingly faulted Toyota's response since Jan. 28, when he said he had “no criticism” of the company and Toyota “did what they're supposed to do.”
Toyota in January recalled about 2.3 million U.S. cars and trucks for sticky accelerator pedals.
The penalty could “very possibly” be the first of multiple fines, said Claybrook, who is former president of Public Citizen, a Washington-based consumer advocacy group.
NHTSA cited documents obtained from Toyota in saying the company knew about the pedal defect since at least Sept. 29.
“NHTSA wants to make it clear that it was Toyota that was at fault and the agency did its best within the system,” said Alan Baum, an auto industry analyst at Baum & Associates in West Bloomfield, Michigan. He said Toyota probably won't contest the fine, “since they've essentially said they screwed up.”
‘Firepower to attorneys'
At a February congressional hearing, Toyota's U.S. sales chief Jim Lentz told lawmakers “we failed to promptly analyze and respond to information emerging from Europe and in the United States” about the sticky pedals.
Toyota has two weeks to accept or contest the proposed fine, Olivia Alair, a Transportation Department spokeswoman, said in an e-mail. If Toyota contests the penalty and a settlement isn't reached, “it would go to court,” she said.
“One of the biggest reasons to fight the fine would be to defend themselves from the language used by the Department of Transportation,” Ed Kim, an industry analyst for forecaster AutoPacific Inc. in Tustin, California, said in an interview. “That would seem to provide some firepower to attorneys that are suing the company.”
NHTSA's largest civil penalty was $1 million against General Motors in 2004 to settle charges that the company failed to conduct a timely recall involving windshield-wiper failures in about 581,000 vehicles.
‘Free Publicity'
“Both industry and government failed the test of putting the safety of America's drivers first” in the Toyota recalls, Representative Darrell Issa, the top Republican on the House Oversight and Government Reform Committee, one of three panels that has held hearings on Toyota actions, said in a statement Monday.
The proposed NHTSA fine may help consumers suing Toyota over sudden acceleration, said Houston attorney W. Mark Lanier, who has filed class-action and individual lawsuits related to the claims.
“Toyota is spending millions of dollars on public relations right now to sway consumers or a potential jury pool,” Lanier said in a phone interview. The fine “is free publicity that counters Toyota.” The penalty probably couldn't be introduced in court because “it's not like a criminal finding in that there was due process,” he said.
Toyota is facing at least 177 consumer and shareholder lawsuits seeking class-action status and at least 56 suits claiming personal injuries or deaths caused by sudden acceleration incidents, according to data compiled by Bloomberg. Lanier has filed two personal injury cases and is considering filing about 100 others, including a dozen involving deaths, he said.
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