Chevrolet to Get Michigan-made Version of Opel Zafira
Jalopnik, among other sites, is reporting that General Motors is planning on building a version of the European Opel Zafira mini-minivan in Michigan, starting as early as 2009. (I have my doubts whether they'll meet that on-sale date.) Even though Saturn is the new Americanized Opel, Chevrolet is set to get the first version, with Saturn to follow.
If you don't know about the Zafira, it's a 4-cylinder 3-row MPV, similar to the Mazda5 and the Kia Rondo, but with what appears to be more flexible seating and more uplevel content options (at least in Europe). I first blogged about the Zafira in 2005.
I've always been intrieged by the Zafira, especially after seeing this commercial with the Zafira being dropped out of an airplane, with freefall skydivers entering the car in mid-air. It would be interesting to see a small 3-row peoplemover powered by GM's 2.0-liter direct-injection, turbocharged Ecotech engine coupled with a dual-clutch gearbox. They might just pry money out of my hands with one of those.
Monday, November 12, 2007
Wednesday, November 07, 2007
From the Insult to Injury File:
Toyota Reports Record Quarterly income
Toyota announced a record quarterly profit equivalent to $8 billion (US). Toyota set quarterly records in revenue, profit and number of vehicles sold.
Toyota Reports Record Quarterly income
Toyota announced a record quarterly profit equivalent to $8 billion (US). Toyota set quarterly records in revenue, profit and number of vehicles sold.
From the "Is this anything?" file
GM Takes $39 Billion Noncash Charge
There are lies, damn lies, and General Motors accounting. Yesterday I read that General Motors announced that it would report a $39 billion quarterly loss. That loss is dominated by a $37 billion noncash charge against assets based on a writedown of tax-loss carryforwards held as assets. The company stated that the company's cash position and business prospects weren't affected, and the market yawned, with the stock going down less than two dollars in afterhours training. Even this morning, there has been no Exodus from the stock.
The news stories that came out yesterday were garbage, basically. There was no analysis or scrutiny of the company's statement. It was no coincidence that General Motors released the statement on an election day, a near holiday with many journalists off or covering other things. Cash or no cash, $39 billion is still real money to me, so I'll tell you what I make out of this, whether it is a hat, a broach or a pterodactyl.
So far, the Detroit Free Press has done the best at putting this in perspective. The full GM spokeshole press release is here at jalopnik.com. Cash or no cash, this is the largest quarterly loss in automotive history. As I write this, GM stock is trading for about $34 and some change per share. This quarterly loss alone amounts to $68.90 per share according to freep.com.
It may be true that the paper loss does not affect GM's cash position. (Although the company's cash hord did go down $2.5 billion in the quarter.) It may also be true that GM's business prospects are unaffected. That doesn't mean that this is insignificant, especially if you are a GM shareholder. It's also important if you are a GM employee who now has a vested interest in GM stock thanks to your brand new VEBA.
To explain the significance, you have to understand the asset that GM wrote down. General Motors held on its balance sheet credits for past losses that it could use as credits to reduce future tax liability. According to Generally Accepted Accounting Practices, this type of paper asset must have some reasonable possibility of being converted into a useful cash type asset at some reasonable point of time in the future, otherwise this asset should not be given the same status as a real asset, such as cash. The write-down by General Motors is a tacit admission that they have no reasonable prospects of making profits in the near term that would make this asset useful. In other words, the company is saying that it really doesn't have the foggiest idea when it's going to be profitable again. Why announce the change now? Did the accountants suddenly get religion? Or did they realize that the leg's going to have to be cut off anyway, so they might as well bite the bullet.
I believe that General Motors may be salvagable, but virtually none of the future earnings of the company will go to current shareholders, no matter what. For the company to be successful, it will have to recapitalize at some point, and that will mean issuing new stock. Already there will likely be dilution of ownership based on the VEBA.
Speaking of VEBA, the UAW was sold a deal based upon GM's books during the negotiations. For the company's financial officer to announce suddenly that $39 billion on the books was an imaginary asset is highly suspicious, and it may end up being the subject of litigation. I'm sure the professionals that the UAW hired to look at the books realized that there was $37 billion of bullshit sitting in GM's asset column, but the union members were never explicitly told that their retirement healthcare was going to be financed to a large part based on company stock, and the company stock is supported by imaginary but worthless assets equal to twice the stock price.
In the wake of all this it is almost anticlimactic to mention that $1.6 billion of GM's quarterly losses came from losses at GMAC. It's not a record or anything, but it's half of what it would cost to develop a new car model, and there's no guarantee that things are going to be better next quarter.
If you have any investment in GM stock, what are you doing still reading this? you need to get busy. If you want to read more about this, I'm sure Robert Farago at thetruthaboutcars.com will have a new GM Deathwatch momentarily.
GM Takes $39 Billion Noncash Charge
There are lies, damn lies, and General Motors accounting. Yesterday I read that General Motors announced that it would report a $39 billion quarterly loss. That loss is dominated by a $37 billion noncash charge against assets based on a writedown of tax-loss carryforwards held as assets. The company stated that the company's cash position and business prospects weren't affected, and the market yawned, with the stock going down less than two dollars in afterhours training. Even this morning, there has been no Exodus from the stock.
The news stories that came out yesterday were garbage, basically. There was no analysis or scrutiny of the company's statement. It was no coincidence that General Motors released the statement on an election day, a near holiday with many journalists off or covering other things. Cash or no cash, $39 billion is still real money to me, so I'll tell you what I make out of this, whether it is a hat, a broach or a pterodactyl.
So far, the Detroit Free Press has done the best at putting this in perspective. The full GM spokeshole press release is here at jalopnik.com. Cash or no cash, this is the largest quarterly loss in automotive history. As I write this, GM stock is trading for about $34 and some change per share. This quarterly loss alone amounts to $68.90 per share according to freep.com.
It may be true that the paper loss does not affect GM's cash position. (Although the company's cash hord did go down $2.5 billion in the quarter.) It may also be true that GM's business prospects are unaffected. That doesn't mean that this is insignificant, especially if you are a GM shareholder. It's also important if you are a GM employee who now has a vested interest in GM stock thanks to your brand new VEBA.
To explain the significance, you have to understand the asset that GM wrote down. General Motors held on its balance sheet credits for past losses that it could use as credits to reduce future tax liability. According to Generally Accepted Accounting Practices, this type of paper asset must have some reasonable possibility of being converted into a useful cash type asset at some reasonable point of time in the future, otherwise this asset should not be given the same status as a real asset, such as cash. The write-down by General Motors is a tacit admission that they have no reasonable prospects of making profits in the near term that would make this asset useful. In other words, the company is saying that it really doesn't have the foggiest idea when it's going to be profitable again. Why announce the change now? Did the accountants suddenly get religion? Or did they realize that the leg's going to have to be cut off anyway, so they might as well bite the bullet.
I believe that General Motors may be salvagable, but virtually none of the future earnings of the company will go to current shareholders, no matter what. For the company to be successful, it will have to recapitalize at some point, and that will mean issuing new stock. Already there will likely be dilution of ownership based on the VEBA.
Speaking of VEBA, the UAW was sold a deal based upon GM's books during the negotiations. For the company's financial officer to announce suddenly that $39 billion on the books was an imaginary asset is highly suspicious, and it may end up being the subject of litigation. I'm sure the professionals that the UAW hired to look at the books realized that there was $37 billion of bullshit sitting in GM's asset column, but the union members were never explicitly told that their retirement healthcare was going to be financed to a large part based on company stock, and the company stock is supported by imaginary but worthless assets equal to twice the stock price.
In the wake of all this it is almost anticlimactic to mention that $1.6 billion of GM's quarterly losses came from losses at GMAC. It's not a record or anything, but it's half of what it would cost to develop a new car model, and there's no guarantee that things are going to be better next quarter.
If you have any investment in GM stock, what are you doing still reading this? you need to get busy. If you want to read more about this, I'm sure Robert Farago at thetruthaboutcars.com will have a new GM Deathwatch momentarily.
Monday, November 05, 2007
From the Contract Demands file:
Restroom Videogames
You never know what you absolutely gotta have until you see it. Now that I've seen it, I must have it. It's a urinal driving game. The computer monitor is at eye-level above the urinal, and you control your car by aiming your stream. We must have this. It must be written into our next contract. We can make sure that the game is adapted for the ladies. Those who are flow-challenged can start with a handicap. According to Engadget, this game is banned in Belgium, so you know it has to be good.
Restroom Videogames
You never know what you absolutely gotta have until you see it. Now that I've seen it, I must have it. It's a urinal driving game. The computer monitor is at eye-level above the urinal, and you control your car by aiming your stream. We must have this. It must be written into our next contract. We can make sure that the game is adapted for the ladies. Those who are flow-challenged can start with a handicap. According to Engadget, this game is banned in Belgium, so you know it has to be good.
Tentative Ford Deal
Late Friday, Ford and the UAW came to tentative contract terms. The deal is similar in concept to the Chrysler and GM deals. The contract includes a VEBA and a two-tier wage structure. On balance, the UAW may have given up more concessions to Ford, however, Ford (supposedly) agreed to keep open two plants that were originally slated to close.
There is an interesting difference in the VEBA. Ford is only putting 40% of the funds in cash, compared to 54% in the GM deal and 59% for Chrysler. Ford agreed to invest the remainder of the cash in its factories to make them capable of producing more than one model. Corrected 12/47 AM 11/5/2007
Source: Detroit News
Late Friday, Ford and the UAW came to tentative contract terms. The deal is similar in concept to the Chrysler and GM deals. The contract includes a VEBA and a two-tier wage structure. On balance, the UAW may have given up more concessions to Ford, however, Ford (supposedly) agreed to keep open two plants that were originally slated to close.
There is an interesting difference in the VEBA. Ford is only putting 40% of the funds in cash, compared to 54% in the GM deal and 59% for Chrysler. Ford agreed to invest the remainder of the cash in its factories to make them capable of producing more than one model. Corrected 12/47 AM 11/5/2007
Source: Detroit News
Friday, November 02, 2007
Youtube Video of the Day
Because you Just can't have enough Jimmy Osmond
Here's a clip from the Donny and Marie Show with Donny in Keith Emerson mode, wailing on two stacks of synthesizers, with Jimmy Osmond and Jay Osmond exchanging drum solos with Desi Arnez, Jr. I don't see how I missed this one the first time around.
Because you Just can't have enough Jimmy Osmond
Here's a clip from the Donny and Marie Show with Donny in Keith Emerson mode, wailing on two stacks of synthesizers, with Jimmy Osmond and Jay Osmond exchanging drum solos with Desi Arnez, Jr. I don't see how I missed this one the first time around.
Friday Mish Mash #1
Edmunds Inside Line - Drives the 2008 Chevrolet Malibu
All positives except for steering. It's heavy though. The V-6 weighed in at 3,649 lbs, about as heavy as an old Pontiac Aztek, and within a cheese sandwich of its bigger brother, the Impala.
Friday Mish Mash #2
Meet Porky the Corolla
Speaking of weight, the 2009 Toyota Corolla is taking some heat over at Autoblog Green for gaining weight and losing fuel economy. To put things in perspective, the Corolla Matrix with the Camry's 2.4 liter engine has a highway EPA rating of 29, just one MPG more than the full-sized Ford Taurus, which has about a hundred horsepower advantage over the Matrix. Automakers are never going to make progress in Corporate Average Fuel Economy if every iteration of a model gains 200 to 400 lbs. (I'm looking at you Honda Accord.)
Friday Mish Mash #3
Businessweek's Cars for bargain hunters
Businessweek compared the actual selling prices to the Mfr list prices of various models and came up with the 20 biggest automotive "bargains"; by bargains, they mean the cars that sell for the highest percentage off sticker price figuring in incentives. By this measure Chrysler LLC comes out the big winner with 8 models in the top 20. The Jeep Commander is selling for 29% off sticker price, and the Dodge Ram 1500 is selling for 28% off sticker price. Though Businessweek is the source of the of the information, the presentation and commentary at thetruthaboutcars.com is better.
Edmunds Inside Line - Drives the 2008 Chevrolet Malibu
All positives except for steering. It's heavy though. The V-6 weighed in at 3,649 lbs, about as heavy as an old Pontiac Aztek, and within a cheese sandwich of its bigger brother, the Impala.
Friday Mish Mash #2
Meet Porky the Corolla
Speaking of weight, the 2009 Toyota Corolla is taking some heat over at Autoblog Green for gaining weight and losing fuel economy. To put things in perspective, the Corolla Matrix with the Camry's 2.4 liter engine has a highway EPA rating of 29, just one MPG more than the full-sized Ford Taurus, which has about a hundred horsepower advantage over the Matrix. Automakers are never going to make progress in Corporate Average Fuel Economy if every iteration of a model gains 200 to 400 lbs. (I'm looking at you Honda Accord.)
Friday Mish Mash #3
Businessweek's Cars for bargain hunters
Businessweek compared the actual selling prices to the Mfr list prices of various models and came up with the 20 biggest automotive "bargains"; by bargains, they mean the cars that sell for the highest percentage off sticker price figuring in incentives. By this measure Chrysler LLC comes out the big winner with 8 models in the top 20. The Jeep Commander is selling for 29% off sticker price, and the Dodge Ram 1500 is selling for 28% off sticker price. Though Businessweek is the source of the of the information, the presentation and commentary at thetruthaboutcars.com is better.
Ford within Hours of Tentative Contract
Autonews.com has flashed a story that Ford and the UAW are within hours of a tentative collective bargaining agreement. Earlier speculation was that Ford bargaining would be hurt by tummult at Chrysler over thousands of layoffs the week after their contract with UAW was approved.
According to Autonews, Ford agreed to outsource fewer non-manufacturing jobs than Chrysler or GM, including forklift drivers. Other provisions appear to be similar to the GM and chrysler pacts, including two-tier wage levels, VEBA plan for retiree benefits.
Autonews.com has flashed a story that Ford and the UAW are within hours of a tentative collective bargaining agreement. Earlier speculation was that Ford bargaining would be hurt by tummult at Chrysler over thousands of layoffs the week after their contract with UAW was approved.
According to Autonews, Ford agreed to outsource fewer non-manufacturing jobs than Chrysler or GM, including forklift drivers. Other provisions appear to be similar to the GM and chrysler pacts, including two-tier wage levels, VEBA plan for retiree benefits.
Thursday, November 01, 2007
New Holidays for Our Next Contract?
I'm always thinking ahead regarding our next contract. I just heard from a preacher for the Church of the SubGenius. Not that I'm ready to convert or anything, but I have to admit, they have lots of holidays that it would be great gravy if we could get these days off in our next contract negotiation. Here are the holidays (from the Wikipedia entry):
I'm always thinking ahead regarding our next contract. I just heard from a preacher for the Church of the SubGenius. Not that I'm ready to convert or anything, but I have to admit, they have lots of holidays that it would be great gravy if we could get these days off in our next contract negotiation. Here are the holidays (from the Wikipedia entry):
January 16 - The Night of the Lemur
January 24 - The Feast of St.Klaatu
February 16 - Cremation Wednesday
February 23 - The Feast of St.Monty Python
March 8 - The Feast of Weird Al Yankovic
March 17 - The Feast of the Blessed Leprechaun
March 28 - Palmistry Sunday
April 1 - The Feast of Saint Eris
April 13 - Saint Bill Hicks Day
April 15 - The Feast of Saint Dracula
May 6 - The Feast of Saint Guinness the Stout
May 31 - Desecration Day
June 1 - Yell "Fudge" at North American Cobras Day
June 22 - The Feast of Saint Kali
July 16 - The Display of the Embarrassing Swimsuits
July 17 - The Feast of Saint Caligula
August 1 - Drug Side-Effects Day
August 6 - The Dance of the Insensitive Bastards
September 1 - Start of the Holy Month of "Ramalamadingdong"
September 6 - Caesarean Section Day
September 20 - Yummy Kippers Day
October 9 - The Feast of Saint Attila
October 20 - The Feast of Saint Oliver the humanzee
November 10 - The Feast of Saint Cthulhu
November 19 - Hate for the Sake of Hating Day
December 9 - The Martyrdom of Saint Kenny
December 14 - Whiny Victimization/Co-Dependency Day
December 31 - The Feast of Saint Lucifer
Chryslerberus Announces 6000-7000 Job Cuts
Just a week after the UAW's contract with Chrysler was ratified, Chrysler, LLC announced plans to lay off 4,000 UAW members through shift reductions in Michigan, Illinois and Ohio. Earlier this week, Chrysler announced plans to lay off 1,000 salaried workers and 1,100 contract workers. Total job cuts in this round will amount approximately 6,000 workers (Detroit News) or 7,000 workers (Detroit Free Press). These cuts are part of an overall plan to cut the hourly workforce by 11,000 and the salaried workforce by 2,000. Most analysts think Cerberus's overall plan is to make Chrysler lean enough to make it an attractive aquisition candidate for another firm. In the past there has been speculation that prospective buyers could include Renault, General Motors or Magna International. Personally, I think the odds of General Motors buying Chrysler are about the same as the odds of me growing wings and flying home this afternoon. Renault would buy if the price was right. Magna seems to have a strange affinity to Chrysler, kind of like a moth attracted to a porchlight.
PT CRUISER LIVES - PT Convertible and Crossfire Die
In an addendum to yesterday's story about Chrysler's cancellation of several models. Yesterday I reported that the PT Cruiser was among the casualties. Autoblog reports today that only the PT Cruiser Convertible is being canned. The regular PT Cruiser Survives. The semi-Mercedes Chrysler Crossfire got caught in ints namesake, and it will disappear.
Just a week after the UAW's contract with Chrysler was ratified, Chrysler, LLC announced plans to lay off 4,000 UAW members through shift reductions in Michigan, Illinois and Ohio. Earlier this week, Chrysler announced plans to lay off 1,000 salaried workers and 1,100 contract workers. Total job cuts in this round will amount approximately 6,000 workers (Detroit News) or 7,000 workers (Detroit Free Press). These cuts are part of an overall plan to cut the hourly workforce by 11,000 and the salaried workforce by 2,000. Most analysts think Cerberus's overall plan is to make Chrysler lean enough to make it an attractive aquisition candidate for another firm. In the past there has been speculation that prospective buyers could include Renault, General Motors or Magna International. Personally, I think the odds of General Motors buying Chrysler are about the same as the odds of me growing wings and flying home this afternoon. Renault would buy if the price was right. Magna seems to have a strange affinity to Chrysler, kind of like a moth attracted to a porchlight.
PT CRUISER LIVES - PT Convertible and Crossfire Die
In an addendum to yesterday's story about Chrysler's cancellation of several models. Yesterday I reported that the PT Cruiser was among the casualties. Autoblog reports today that only the PT Cruiser Convertible is being canned. The regular PT Cruiser Survives. The semi-Mercedes Chrysler Crossfire got caught in ints namesake, and it will disappear.
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