Canada Week: You-Ess-Ehh!! You-Ess-Ehh!!

Some good news this week for Canadian auto workers.

After being closed since Chrysler/Fiat filed for bankruptcy on April 30, the automaker is restarting seven of its North American plants this week, including its Canadian Windsor and Brampton facilities.

But after two recent awarding of new small car plants, it looks like good ol’ U.S. nationalism will shut out Canada from winning any new auto manufacturing contracts for the foreseeable future. 

Government Motors—which BTW we Canadian taxpayers own a chunk of now, eh?—just decided which plant it’s going to  make the next Chevrolet Aveo subcompact at.

And—surprise, surprise—it ain’t Oshawa.

Nope. With over US $1 billion in tax incentives and training support, GM picked one of its existing plants in Wisconsin.

Of course, (more) free government money wasn’t the only tipping point in choosing the U.S. plant.

“If they hire enough lower wage people, they can come within $100 to $150 of the cost of building a comparable car in China,” explains Sean McAlinden of the Center for Automotive Research.

Gotcha!!

Now back to the second government ward: Chrysler/Fiat.

The first planned North American product of this American-Italian hookup will be the Fiat 500 city car (forget Cinquecento, that’s been abandoned in any U.S. PR info.)

The 500 is due sometime in 2011. And it won’t be built in Windsor, nor Brampton, nor where it was most likely to be made for the most profit: in Mexico.

Nope. How about Chrysler's plant in Belvedere, Illinois, famous for making the Dodge Neon until the spring of 2006.

Did anyone think this wasn’t going to happen?

Did anyone actually believe that U.S. government-owned GM and Chrysler/Fiat were going to award contracts outside the U.S. of A.?

[Source: Detroit Free Press, Inside Line]

Did GM cut the wrong brand?

I thought Government Motors had learned its lessons from the mistakes it made when the “G” stood for “General.” But with the announcement that the new and so-called “premium” 2010 Buick Allure/LaCrosse will be getting a very “mainstream” four-cylinder engine, I’m not so sure.

Targeted against other not-quite-luxury brands such as Honda’s Acura, Nissan’s Infiniti and especially Toyota’s Lexus, Buick’s brand shtick is lots of goodies and high tech, but with a cosseting ride and coffin-quiet driving experience.

So, in that regard, the ’10 Allure was originally supposed to get an engine lineup of exclusive V6s. Just like its rivals.

But now, a four-banger Allure treads a little too closely to the more mainstream Chevrolet Malibu, n’est ce pas? It creates an opportunity for sales cannibalism that Toyota, Nissan and Honda strictly avoid by offering only V6s in their respective Allure rivals: the Lexus ES 350, Infiniti G37 and Acura TL.

In other words: why not just get the less expensive Malibu…

What’s worse, the Allure's four isn’t the 2.0-litre turbo mill that generates 220 hp in the Chinese Buick Regal and Opel Insignia. Instead, we’ll have to make due with a 182 hp 2.4L unit.

When asked which of the four GM brands planned elimination they want to survive, in a recent survey, 44 per cent of respondents selected Pontiac—almost double second place Hummer (27 per cent). Saab was chosen by 20 per cent of respondents, and Saturn by only 9.

Which begs the question: Should Pontiac have been kept on as a niche performance brand, offering exclusive products not found at any other GM band, instead of Buick?

[Source: CarGurus]

Why JD Power’s IQS is BS

Feared and revered JD Power & Associates announced its winners and losers this week in its annual Initial Quality Survey for new vehicles. But between you, me, and the blogoshpere, the exercise is a meaningless bit of PR fluff.

For those interested in how a new car will do in the long term, JD’s IQS is irrelevant.

It only measures “mechanical and design problems” in the first 90 days of ownership.

I mean c’mon. This isn’t 1978. Cars are inherently better made today. Even the bottom-feeder, low-end  stuff is relatively dead reliable.

In the real world, the difference between 2008's top brand (Lexus had 0.84 per vehicle) and the worst (Mini with 1.65 problems per vehicle) is relatively thin.

Like a marriage, how about you get back to me get me after the honeymoon’s worn off. Say, like in three years.

For that, you need to look at JD’s Vehicle Dependability Study. That report measures problems experienced by original owners of three-year-old vehicles. And it finds that—duh?!—on average, customers report experiencing 75 per cent more problems in the third year of ownership than during the first 90 days.

The 2009 version is due in early August. But the 2008 VDS report said Lexus is tops here (for a 14th consecutive year) with U.S.-only Mercury, Cadillac, Toyota and Acura rounding out the top five.

Saab, U.S.-only Isuzu, Kia, Suzuki and Land Rover ranked at the bottom.

So, as always, caveat emptor. Because sometimes it’s way easier to get out of a marriage, than it is an onerous car lease…

[Source: JD Power, The Star]

Autopocalypse: Karmann is kaput

It's a sad day for convertible fans. After making over 3.3 million automobiles for various automakers, German's largest independent automaker, Karmann, is all but kaput. It's most famous car was the Volkswagen Karmann Ghia (left.) But the company's last car to roll out of its factory was a Mercedes-Benz CLK.

Its employees have been given notice. And there is hope to change Karmann's focus to parts production if officials are able to successfully reorganize the firm and stay in business. But in today's Autopocalypse, that's an unlikely scenario.

As we say auf wiedersehen to Karmann, what was you favourite recent Karmann prodcut from the short list below?

VW New Beetle

Mercdes CLK

Chrysler Sebring

VW Eos

[Source: thelocal.de]

Bailout Blues: Interested in buying a Canadian-made Opel? Hang on to your wallet

Don’t count on Canadian-owned Magna’s boast of selling Canadian-made Opels here happening any time soon.

Up until this point, the courting of bankrupt Government Motors Euro Opel brand came down to either Magna’s Russian-backed consortium or Fiat head Don Marchionne’s plan to take over the automotive world, one dead brand at a time.

Magna won. Fiat lost out. Sort of. Maybe.

But know this: 2009 is full of elections in Germany, with a nationwide vote scheduled for September. And with local politicians and autoworker union leaders looking to cling onto evaporating German jobs—at least until this fall’s elections are over—Magna’s offer of canning less Opel workers than Fiat’s got them to where we are today.

But after the elections, all bets are off. Media reports say GM wants Opel to stay in Europe and not sell cars in China or North America. And the German government doesn’t want to get stuck with €4 billion in pension payments should Opel go tango-uniform.

Need more evidence of Magna’s shaky ground? GM is on record saying that all previous bidders are welcome back after the elections. And when all is said is done, the most likely winner will probably neither be Magna nor Fiat.

Opel is opening its books to let Chinese automaker BAIC take a peak. In fact, BAIC Chairman Xu Heyi is going to Frankfurt to present his plan to unions in Rüsselsheim and government German officials in Berlin.

One advantage BAIC has over Magna and Fiat? It already has a successful joint venture with Mercedes' parent Daimler.

Sorry Magna. You can spin all you want. Selling and/or building Opels in Canada ain’t gonna happen.

How sad are you that the long-held hope to have a truly national auto company looks dead in the water?

[Sources: Frankfurter Allgemeine Zeitung, Automobilwoche, Reuters]

Audi's sexy A5 Sportback stopped at the U.S. border

Bailout Blues: “Interbuildability” to save Government Motors

Believe me. I could do a blog entry every hour for the next millennium on the reasons why the 20th century’s largest company has become a state-owned shell of its former self. But here’s a little slice of insight…

Government Motors has come up with a new manufacturing strategy, one that it thinks will allow it to build small vehicles profitably in North America.

Are you ready for it? It’s called “interbuildability.”

In GM’s new world, “interbuildability” means different models on the same architecture will have "plug and play" component modules, “such as exhaust systems and front-end modules.”

Wow. The innovation just never stops at GM, eh folks?

“Interbuildability”… “Shminterbuildability”…whatever… GM’s radical “new” manufacturing strategy is better known as good old “standardization”, a concept its rivals grasped, oh, decades ago.

What’s more amazing than GM only getting around to this idea now, is that someone in corporate PR actually thought this was worth trumpeting about.

Head. Out. Of. Sand. Soon. Please.

And just as the sunrise follows night, expect “Built by Interbuildability” badges on very new GM car.

Do you think "interbuildability" will allow GM to actually make money making small cars in North America, something it admittedly has never been able to do in the past?

How much better do you feel about getting your tax money back with GM’s latest triumph?

[Source: Automotive News]

Bailout Blues: Ooo, how I wish Chrysler would just go away...

So the “deal to save Chrysler” with Fiat went through yesterday.

Big deal.

Can someone explain to me how different the outcome will be from the last two “deals to save Chrysler” ended up? How will Fiat succeed where the better-funded Daimler couldn't? Or where the financial whiz kids from Cerberus most recently failed?

I promoted the idea that these whole shenanigans with Fiat has been heavily one sided in the Italian automaker’s favour. Remember, Fiat doesn’t have any skin in this game.

For the cost of some legal and PR fees, Fiat is getting billions in Canadian and U.S. tax payer money, Chrysler’s plants, parts and dealer network, and the only valuable asset in the portfolio: the Jeep brand.

In the end, it’s always been about Fiat head Sergio “Don” Marchionne’s grand plan to get big enough to survive the current Autopocalypse. Part of which was nailing Opel. Round One went to Magna. But Fiat, and other bidders, will get a second crack after the upcoming German elections. If not, where does Chrysler fit into the Don's plans?

In yesterday’s press release announcing the “strategic alliance,” Fiat’s claim that the deal will give the Detroit automaker the “resources, technology and worldwide distribution network required to compete effectively on a global scale” is nothing more than unmitigated PR BS.

Puhleeze…I want whatever you’re smoking if you think Fiat’s goal is to return Chrysler as a strong rival to Government Motors or Ford.

Will Fiat ever sell their products here through Chrysler dealers?

Maybe. But not until 2010. At the earliest. If ever.

Will American buyers all-of-a-sudden think a tinny, unreliable Fiat Punto with a Chrysler badge is a winning combination?

Sure. The day after they give up their right to bear arms.

Then what?

Hopefully we won’t have to wait too long to find out.

For the next year and a half—at the very least—Chrysler will still be shilling the same crappy cars that no one wants to buy unless they are heavily discounted.

What happens when Fiat is presented with at least another $ 8 billion is losses as Chrysler posted in 2008?

If the Don is smart, he won’t follow in the foolish footsteps of Daimler and Cerberus. He will have bailed on Chrysler long before he has to start writing cheques to prop up an unsustainable business. When that day does come, and it will, trust me, he can just pick up the phone and call some desperate Chinese heavy equipment maker, right?

Don, do us all a favour and make that call sooner than later. Make Chrysler go away—puhleeeze!!

Bailout Blues: Even the Chinese don’t want a Hummer

Just as Chrysler’s deal with Fiat has become fraught with problems, Government Motors’ unloading of its terminally irrelevant Hummer brand may never come to pass as well.

Last week, GM announced that it has a tentative proposal from Chinese heavy equipment manufacturer Sichuan Tengzhong (who?) to take over Hummer. But let’s underline, bold, and italicize the word “tentative.”

One: No dollar figures have been announced. Never a good thing with these types of deals. Two: The Chinese government must grant its seal of approval. If you've ever applied for a Chinese travel visa, you know this is never a sure thing either.

For example, an article in the state-run Chinese media outlet Xinhua read:

“General Motors' HUMMER is considered as an exaggerated and extreme example of a disregard for the environment and there are significant brand negatives for the Chinese company Tengzhong to buy it. The vehicle is too big, uses too much gas, and is viewed as a toy for the rich. These are rather significant brand negatives for the Chinese company Tengzhong to consider. HUMMER is a difficult brand name to reconcile with current global conditions and political thought.”

Jeez. Sounds like the Chinese have a more realistic view of Hummer than anyone at GM ever did…

[Source: Xinhua via AutoblogGreen]

Over to You: Is Chrysler going to see the light of 2010?

While everyone is already counting their polli in the Chrysler/Fiat deal, there are some very darkening clouds ready to rain on Don Marchionne's picnic:

• Even if Chrysler gets out of bankruptcy lickety-split and fires up its idled assembly plants, the company will have to delay some 2011 and 2012 models, foregoing hundreds of millions of dollars in revenue. Then/if gets up and running agian, it will have to deal with "a reduced staff, wary suppliers, shaken dealers, a recession -- and a new owner";

• Despite the U.S. Supreme Court putting a temporary hold on the sale of Chrysler to a group led by Fiat on Monday, when asked if Fiat would pull out of the deal if it is not completed by its own June 15 deadline, Marchionne has said "We would never walk away."

But...both Chrysler and the Obama administration have said a long delay could kill the deal and end up with Chrysler's liquidation.

Over to You: Do you think that Chrysler, as a full-fledged automaker, will make it to New Year's 2010?

Or will we more than likley see a slow liquidation of its various bits and bites, as per what Government Motors is going through right now?

[Source: Automotive News, Bloomberg]