2008 Buick Enclave Premieres in L.A.

The 2008 Buick Enclave, Buick's new 3-row crossover, has officially premiered at the Los Angeles Auto Show. This link shows the Buick to have a very impressive interior, with rich-looking materials and impressive versatility. Although I haven't seen the Buick in person, it appears to have Lexus-like interior accommodations. The Enclave features a 270 horsepower 3.6 liter V-6, but at 4900+ lbs., it's not going to be a hotrod. Despite the power and weight, Buick promises minivan-like fuel economy numbers around 17/24 city/highway. That's quite good for a vehicle this size, about the same as the outgoing Buick Rendezvous, which is up to 1000 lbs. lighter, almost a foot-and-a-half shorter, and five inches narrower.

Speaking of size, the exterior dimensions of the Enclave may be its Achilles heel. Spec sheets say the Buick is 202.3 inches long, that's 2 inches longer than my Dodge Grand Caravan minivan. When I close my garage door, if I position my van just right, I have two inches clearance for the garage door to come down. At 79" wide, it's an inch wider than my minivan. If I park perfectly, we can just barely open the car doors enough to get in the car next to the van. An extra inch might be an inch too far. There might be a lot of new Buick Enclave owners who have to break it to their spouses that one of them is going to have to park outside.

More than Half of Ford Workers Accepted Buyouts
35,000 Workers to Voluntarily Leave

Wonder why Ford was looking for $18 billion in cash? It looks like a couple billion of it will go to pay off workers who accepted the company's buyout offer. According to the Detroit News, more than half of Ford's blue collar workforce accepted the buyout, thus opening the door for thousands of lower-paid "temporary" workers. It also opens the door to transfer Visteon workers to Ford, thereby enabling the planned closing of Visteon plants.

I believe that Ford's cash management in this crisis period has been better than General Motors'. By selling off valuable assets piecemeal, the General is giving up the assets that may open the door to eventual profitability. On the other hand, Ford borrowed against its assets. Ford is using proceeds to cut structural costs, but it is retaining the assets necessary to be profitable down the line.

More than Half of Ford Workers Accepted Buyouts
35,000 Workers to Voluntarily Leave

Wonder why Ford was looking for $18 billion in cash? It looks like a couple billion of it will go to pay off workers who accepted the company's buyout offer. According to the Detroit News, more than half of Ford's blue collar workforce accepted the buyout, thus opening the door for thousands of lower-paid "temporary" workers. It also opens the door to transfer Visteon workers to Ford, thereby enabling the planned closing of Visteon plants.

I believe that Ford's cash management in this crisis period has been better than General Motors'. By selling off valuable assets piecemeal, the General is giving up the assets that may open the door to eventual profitability. On the other hand, Ford borrowed against its assets. Ford is using proceeds to cut structural costs, but it is retaining the assets necessary to be profitable down the line.

Forbes:"Ford Bets the Farm"

Ford Motor Co. has taken out a $18 billion secured line of credit. Put the emphasis on the word "secured". Ford has pledged most of its North American assets to get $18 billion with which to implement it's way forward. According to Forbes.com, not only are the plants and machinery securing the loans, but Ford Motor Credit as well. Does this foreclose any selling of a minority interest in the finance company? It would appear so.

It seems to me that tying the substantial assets of Ford up with a single secured lender will make the company much easier to sell in bankruptcy compared to a situation with many creditors and a power vaccum. The secured creditor simply sells its interest to the suitor. The suitor makes a pitch to the bankruptcy court to buy out the claims of the small dollar creditors, and Ford becomes "New Ford". The suiter could be Renault/Nissan, the Ford family or whomever.

So how will we know if Ford's gamble works? You'll know it didn't work when you see a villainous character with a black top hat, black cape and handlebar mustache lurking around looking for people to tie to the railroad tracks.

An Inconvenient Truth now on DVD

Al Gore's documentary on global warming, An Inconvenient Truth, has been quietly released on DVD. It seems like Al was everywhere when the movie was released to theaters. Now with the DVD release, Al Gore is nowhere to be seen.

Site News 11/21/06


IF you wonder why it has been quiet lately, I have been in a time crunch. I have at least a half dozen postings at a draft stage that I haven't had time to fully complete. With any luck, I'll get a couple hours over Thanksgiving break to get things updated.

General Motors Update 11/21/06

Robert Farago just published installment 100 of his General Motors Death Watch series. Farago asserts that the General is just about out of cash and mechanisms to generate cash. Buried in shareholder disclosure documents is a warning about a negative (book value) net worth. Here's a quote and a link.

For those who’re listening, the klaxons are sounding loud and clear. Check this excerpt from a GM press release regarding an upcoming $1.5b seven year secured loan (tied to machinery and equipment and special tools at US production plants).

"GM's ability under some of its existing bond indentures to pledge U.S. property, plant and equipment is likely to be affected in the future by new rules applicable to pension and OPEB accounting, which could cause GM's shareholders' equity in its year-end 2006 financial statements to be negative.”

In other words, the well has run dry. With 51% of its GMAC finance unit (a.k.a. cash cow) set for sale, GM can no longer borrow from this once dependable internal source. As of next year, GM still won’t be able to take out unsecured loans, while the terms of its bond indentures rule out secured loans. With a negative cash flow from its North American operations and no ability to borrow, with debt payments due AND the need to fund Wagoner’s turnaround plan (new products, severance pay, depreciation, etc.), GM’s cash crunch is going critical. The only money available: $8.5b (plus another $4b over three years) from the GMAC sale.

Late last year, GM was reporting about $20 billion in cash available, but financial analysts suggested that less than 1/2 of that would actually be available for operations. So if in the last year, GM's operations, including buyouts and Delphi infusions, used up $10 billion, zero-hour may be at hand

Low-cost Carbon Fiber

Honda and GM have recently made great strides in their fuel cell car programs. To be more efficient in the long run, cars must be lighter. It's a challenge to reduce weight without sacrificing strength, safety, durability while still managing initial costs and repair costs. Probably the most promising material for weight reduction is carbon fiber. Carbon fiber is still way too expensive for mass-market cars. Although carbon fiber has been used for 40 years or more in aerospace, cost reductions through experience curve effects have been slow in coming. Recently, a government-funded project has uncovered a new "precurser" material for carbon fiber that could reduce the cost significantly. The material is lignin, sometimes called kraft-lignin. Lignin is a byproduct of papermaking that usually goes to waste. Info on turning lignin to carbon fiber is here. An article from 2003 on the same topic is here.

Toyota's Profit up 34%
$13 Billion in Profit for the Quarter
GM's Quarterly Loss under $100 million

There's no question that Toyota is becoming the black hole for profit in the auto business. Toyota reported quarterly profits of $13 billion. If replicated over an entire year, toyota's yearly profit would be enough to buy up all the stock of Ford and General Motors, and more than account for the net worth of both companies. Toyota has such a gravitational pull that all the profit in the industry is getting sucked into its giant maw. Actually, that's an overstatement, because Nissan's profit was up 31%; however, with a sales increase of over 17%, Toyota is king of the hill.

Toyota's news overshadowed GM's news that its quarterly loss (as adjusted) fell below $100 million. I wonder though how much of Delphi's ongoing loss must, in the long run make it's way to GM's books. I understand that GM has made accounting adjustments to take into consideration losses atributable to Delphi, but still . . .

Attack of the Killer Minivans

Here's a site dedicated to turbocharged Chrysler minivans. Drag racing in a minivan? It seems like a win-win proposition. If you win it's "Ha ha, you got beat by a minivan!" If you lose, it's "what did you expect, it's a minivan."

Useful Link:
Edmund's Guide to Maintenance Schedules, Recalls & Technical Service Bulletins

Just enter your make, model & year at this link and get all the relevant info for your model of vehicle.

Latest at Sema: $2000 Polycarbonate Wheels

Query: If it's clear, is it still "bling"? The latest thing at the SEMA aftermarket equipment show is clear polycarbonate wheels. Polycarbonate is the material that is used for bulletproof glass, shatterproof eyeglasses and iBook chassis. Now (or soon) you an buy 20" to 24" wheels made out of the stuff. Per Autoblog.com, if you want a set of four, it'll cost you $8,000.

Animal Site of the Week:
Underwatertimes.com

I stumbled upon this neat site when I Googled Gustave, the Killer Croc, from a PBS Special. This site collects news stories about shark attacks, crocodile attacks and more killer sea creature stories, but it also collects news items regarding ocean exploration and ecology in general.

Underwater times