Author: stepcalo

General Motors Chairman and CEO Ed Whitacre

Rep. Darrell Issa, R-Calif., ranking member of the House oversight and Government Reform Committee stated in a letter to GM CEO Ed Whitacre, Jr. that GM “has come dangerously close to committing fraud and that you might have colluded with the U.S. Treasury to deceive the American public.” What the letter refers to is the recent television ad campaign launched by GM whereby Whitacre is seen announcing the repayment in full, by GM, of their government loans.

While this is not a flat out deception, it understates the case as perceived by the public. In reality, GM received bailout funding of about $50 billion; $43 billion would be converted to a government stake in GM, and $17.4 billion of those funds were put into an escrow account, which was tapped by GM to repay the loan portion.

“Our work is not finished, but repaying our loans with interest is a clear sign that our plan is working, and a critical step toward returning GM to profitability and public ownership,” GM spokesman Greg Martin said. “It’s hard to see how GM’s loan repayment could not be seen as a positive milestone for the company and taxpayers.”

Despite being a critic of GM, Sen. Chuck Grassley acknowledged in a speech on the Senate floor that GM was ‘technically correct’ in their statements.

You can check out the commercial after the jump.

– By: Stephen Calogera

Source: Detroit News

After GM and Chrysler greatly reduced the size of their dealer networks following their bankruptcies, legislators required an appeals process for those terminated dealers, and after arbitration, it turns out that GM is going to be reinstating more than one half of the 1,600 dealers who filed appeals.

The cost-cutting measure became a topic of much debate, but was seen as necessary by GM in order to keep their remaining dealers profitable by keeping their volume up. Settlements resulting from the process could be either in the form of reinstatement or some kind of payment arrangement, but one thing is certain; avoiding arbitration will enable GM to better plan vehicle production logistics in the coming months and perhaps year or two.

-By: Stephen Calogera

Source: Detroit News

Lear Corp. will be spending more than $2.2 million at its northwest Indiana seat manufacturing facility where they will be producing seats for the new Ford Explorer SUV. Production positions and some technical and administrative positions will be among the 285 jobs created at the plant this year by way of this deal.

“This is good for middle America, especially since so many jobs were lost,” Lear spokesman Mel Stephens said today. “This isn’t just five jobs; it’s pretty big and significant.”

The new Explorer is slated for production during the fourth quarter of this year at FoMoCo’s Chicago plant, which has been supplied by Lear since the mid-90’s. At least 100 laid-off workers will have the opportunity to secure one of the new jobs at the plant before Lear starts taking applications. Lear currently fills the No. 4 spot on the Automotive News list of top 150 North American suppliers as it employs 75,000 people across 35 countries and pulled in $4.9 billion in sales in 2008.

-By: Stephen Calogera

Source: Automotive News

Chrysler Group has a reached a deal with the shell company that holds its former assets whereby the former is to buy a Michigan assembly plant for $20 million. The purchase will keep the plant under Chrysler control, and reverse a controversial decision that would have closed the plant, much to the chagrin of the UAW. The purchase also means the saving of 1,200 jobs.

The company has announced its plan to produce upgraded versions of the Sebring and Avenger at the plant through 2012, as part of the plan by Chrysler to revitalize their mid-size sedan lineup, which is seen as key for a return to profitability. According to a filing with the U.S. Bankruptcy Court, Old Carco LLC and Chrysler have been negotiating the deal since the unveiling of Chrysler’s five-year business plan back in November.

The Sterling Heights City Council also approved tax incentives to ease the retention of the plant by Chrysler. The sale is still subject to court approval however, and a hearing has been requested on March 11 to consider the matter.

– By: Stephen Calogera

Source: Automotive News (Subscription Required)

Times have certainly been rough for Toyota amidst all the recent recalls and baggage that goes therewith, but Hyundai is soaring high. With seven new models on the way, the Hyundai family has plenty to celebrate.

Dealerships can’t seem to keep enough Tucsons in stock, and people are literally buying the new Sonata as they are rolling off the truck. New models to come include an all-new Elantra, high fuel-economy sport coupe, and a redesigned Accent.

U.S. market share for hyundai has climbed to 4.1% – a full point over last year, and dealers seem to be pretty enthusiastic.

-By: Stephen Calogera

Source: USAToday

Hidden within the press release about the Toyota Prius recall, ToMoCo announced a ‘voluntary safety recall’ on approximately 7,300 early production 2010 Camrys.

The excerpt from the press release is as follows:

Separately, Toyota will conduct a voluntary safety recall on approximately 7,300 early production – 2010 model year Camry vehicles equipped with the 4 cylinder engine to inspect for a power steering hose that may be in contact with a front brake tube. This contact could lead to a hole in the brake tube and cause a brake fluid leak, increased brake pedal stroke and greater vehicle stopping distance. Owners of the involved 2010 Camry vehicles will be notified by mail starting in the middle of February.

Read after the jump for a series of FAQ’s regarding the latest wave of recalls.

FAQs About the 2010 Camry Voluntary Recalls

1. What is the problem with the Camry?

On certain early production 2010 model year Camry vehicles equipped with the 4-cylinder engine, a power steering pressure hose in the engine compartment may be the incorrect length.  If this condition exists, a crimp on the power steering pressure hose may come in contact with the No. 7 front brake tube.

Should this condition continue, a hole may wear in the brake tube and deplete the brake fluid in the vehicle.  As a result, the brake pedal
stroke will increase and lead to greater vehicle stopping distance.

2. Which and how many vehicles are involved?

Approximately 7,300 Camry vehicles in the U.S. are involved.

3. Are there any warnings that this condition exists?

No, there are no specific warnings that this condition exists.

4. What is Toyota going to do?

Any Toyota dealer will inspect and, if necessary, adjust the space between the brake tube and the power steering pressure hose crimp.  Based upon the inspection results, the dealership may need to replace the brake tube.

The inspection/adjustment and, if necessary, the brake tube replacement, will be performed at no charge to the vehicle owner.

5. When will Camry owners be notified?

Toyota will notify owners by mail starting in mid-February 2010.

6. Where can I get more information on this recall?

Information for Toyota customers can be found at www.toyota.com/recall and at the Toyota Customer Experience Center at 1-800-331-4331.

Information for Lexus customers can be found at lexus.com and at the Lexus Customer Assistance Center at 1-800-255-3987.

– By: Stephen Calogera

Unlike at the Detroit auto show, Nissan will in fact have a booth at this year’s Chicago auto show, mainly because it is geared towards consumers, as opposed to Detroit, which is geared towards the industry.

With increasing sales, Nissan saw an opportunity to address their third-largest metro market. With less than a dozen unveilings, very few top execs, and half the media presence of Detroit, Chicago is just not thought to be a crucial as Detroit. That being said however, there will be about 300 more vehicles on Chicago’s floor than on Detroit’s – about 1,000 in total.

“A show shouldn’t just be judged by the number of unveils and media,” said Dave Sloan, president of the Chicago Automobile Trade Association in response to the lack of media hoopla at Chicago. “It’s about getting consumers excited and selling cars.

– By: Stephen Calogera

Source: Detroit News

Toyota Motor Corp. has received a stay of execution it would seem, as the House Oversight and Government Reform Committee canceled hearings set for Wednesday because of the second massive snowstorm in two weeks headed straight for the capital.

The hearing has been tentatively rescheduled for Feb. 24, two days before the House Energy and Commerce Committee is set to hold its own hearing on Toyota.

The Oversight Committee is going to be examining the government’s response to the recall crisis, and attempting to better understand the technical aspect of the problem.

– By: Stephen Calogera

Source: Detroit News

In a move preemptive to Wednesday’s Congressional hearings, ToMoCo’s president, Akio Toyoda, has laid out a detailed plan to restore quality and consumer trust to the Toyota family of vehicles. Toyoda has come under fire as of late for his conspicuous silence regarding the recalls, but the grandson of the company’s founder has claimed personal responsibility and vows to get the company back on track.

In a letter printed in today’s Washington Post, Toyoda wrote: “You have my commitment that Toyota will revitalize the simple but powerful principle that has guided us for 50 years: Toyota will build the highest-quality, safest and most reliable automobiles in the world.”

Toyoda laid out a five-pronged approach to revitalize the company including a top-to-bottom review of the company’s operations, an external safety advisory panel, aggressive investigation of the complaints related to the recalls, institute a plan to better share quality and safety information across global operations, and increased outreach to government safety agencies.

– By: Stephen Calogera

Source: Auto Observer

Considering their bankruptcy only seven months ago, GM must be breathing a sigh of relief at the news that consumer demand for some of their newer models, such as the Chevy Equinox, is outpacing their production ability.

They are not however, necessarily going to expand automated lines to increase production, but rather they will consider the use of body shops where vehicles will be built manually. This move will save the company the 20 months and over $100 million that would be required to start a functional automated assembly line. The vehicles produced manually will also garner a higher profit margin, which will help to offset labor costs incurred by the new manual shop which is rumored to possibly be located in GM’s dormant plant in Spring Hill, Tenn.

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There is still some conflicting news out there as one person close to discussions claims that a decision has been made and the process will be implemented in three months time, while another source says that options are still being considered.

With a current inventory of 390,000 vehicles, GM’s VP for sales Susan Docherty would like to see an inventory as large as 450,000, with particular increases in the stock of certain vehicles such as the GMC Terrain and its sister vehicle, the Chevrolet Equinox.

– By: Stephen Calogera

Source: Free Press

It just gets worse by the day for Toyota Motors. The company is reportedly poised to recall 37,000 new Priuses, and has launched a probe into the Lexus HS250h, a luxury hybrid sold in the U.S. and Japan.

The Prius’s braking comes into question, but unlike the recent recalls, this issue is software related. Yesterday, company officials in Japan said that they have been aware of the issue for a period of time and have already updated the software for vehicles in production.

The Lexus HS250h uses the same braking system as the Prius, but has not been the subject of any reported problems. The probe is just a precautionary safety measure.

Toyota has declined to comment on the situation.

– By: Stephen Calogera

Source: Free Press

Toyota dealers learned in a letter sent out late last night that they will each be receiving a check for up to $75,000 in order to regain consumer trust in the wake of the recent safety recalls.

“Within the next several days, you will receive a check from us (no strings attached) with a simple request — ‘do the right thing on behalf of Toyota customers’,” Toyota group vice president Bob Carter said in the letter to dealers that was sent late Tuesday and obtained by the Associated Press.

In the letter, Carter thanked dealers extending service hours and providing services, and made some suggestions to even further improve service.

Those dealers who moved less than 500 cars last year will receive $7,500 and those who moved more than 4,000 will receive $75,000. Toyota’s American dealer network covers approximately 1,200 dealerships.

Carter has also mentioned that the company is considering other marketing strategies to win back consumer’s confidence, but did not elaborate as to what they might be.

With the resuming of sales on the eight suspended models set to begin, ToMoCo may have to offer purchase incentives on those eight models to jump start the flow of inventories, but no official programs have been announced as of yet.

-By: Stephen Calogera

Source: Detroit News

The House Oversight and Government Reform Committee wants to know why Toyota has yet to extend its recall to pedals made by a second supplier. The committee is set to hold hearings on the issue of February 10.

Rep. John Dingell, D-Dearborn, has also sent letters to Toyota and the National Highway Traffic Safety Administration raising questions about the government’s response to the issue, and also citing the fact that there have been reported incidents as early as 2007 regarding the issue of sticking accelerators. Dingell also raised the issue as to whether the NHTSA had sufficient resources and authority to carry out an investigation.

There have also reportedly been over 100 complaints of sudden acceleration documented since 2007 with regard to the Toyota Tacoma, according to the NHTSA, though Toyota says that the Tacoma is equipped with a different pedal assembly that has not been implicated in the recent issues.

Toyota has issued a statement indicating that unless drivers detect pedal problems, they should feel fully confidant in driving their vehicles.

It has also been suggested by some, Apple Inc. co-founder Steve Wozniak included, that faulty on board computer systems are to blame for the issues, and not floor mats or gas pedals as has been said.

–By: Stephen Calogera

Source: Detroit News

The US Department of Transportation has said that the Obama administration is satisfied with Toyota’s plan to address their recent recalls, after the National Highway Traffic Safety Administration reviewed the company’s plan to address the issue.

Toyota started shipping the new parts dealers yesterday, and plans to resume production of the eight suspended models on February 8.

NHTSA approval is not required in Toyota’s approach, though the administration may object should they find the manufacturer’s approach inadequate. They also said that owners who decide to receive a fix now at dealerships may later receive a new pedal when they become available. “Owners of affected Toyota vehicles should contact their local dealer immediately and exercise caution until repairs can be made,” a statement from the administration said.

Though Toyota seems to be in the clear as far as the NHTSA is concerned, CTS Corp., the manufacturer of the faulty pedals is under investigation to determine if ‘proper and timely notice’ has been given to consumers. The NHTSA also wants to determine whether other carmakers who may have used CTS accelerator assemblies are in line for recalls.

-By: Stephen Calogera

Source: Automotive News

California start-up electric car manufacturer Tesla Motors has filed an IPO of up to $100 million. The Tesla IPO marks the first time since 1956 that an American auto maker has offered an IPO, when Henry Ford first offered shares of FoMoCo.

No pricing details were released, nor an exact time of debut. The offering also marks a significant resurgence in electric car interest.

The SEC filing said that Tesla has sold 937 Roadsters in 18 countries since its inception. The company also holds about 2,000 reservations for the Model-S which is still in development, and has generated around $108.2 million in revenue through September.

– By: Stephen Calogera

Source: Reuters

The safest bet this Super Bowl weekend is that Kim Kardashian will not be hijacked while riding around town. That is because she will be chauffeured around in her brand new Vault XXL@ Limousine by Armor Horse.

The fully armored limousine takes heavy design cues from armored trucks with its ballistic panels, bullet proof glass, gun ports, and escape hatches.

-By: Stephen Calogera

Source: tmz.com

Toyota plants in North America are preparing to receive replacements for the faulty accelerator pedal mechanisms that have prompted the recent wave of massive recalls and suspended sales across the brand. Following the sales halt, five North American plants will experience a production shutdown so that they can fix the accelerator pedals, which are prone to sticking.

“The countermeasure pedal is now available from the supplier,” a source close to Toyota said. “We are now in the transition period. It’s just a matter of time in getting the parts to the plants.”

A Toyota spokesperson said that the supplier has developed the mechanism already, but to what extent it has been distributed is unclear.

A person answering the phone for CTS, the company that manufactured the faulty parts, declined to comment on the situation.

The initial halt in production will be from Feb. 1 to Feb. 5. Fixing vehicles already in the field however, presents a problematic situation, as that would require some 2 million pedals, which is more than the company can produce in a year. Toyota is also considering expanding the recall to Europe and China.

-By: Stephen Calogera

Source: Automotive News

Auto supplier Magna International Inc. has picked up the contract to supply GM with the tops for the new Chevrolet Camaro convertible. German supplier Edscha AG had originally had the contract, but their filing for insolvency has put GM in the position to give the business to Canada based Magna. GM estimates production of about 20,000 units for the first-year Camaro convertible; only the Mustang sells as many.

With only 41,380 convertibles built by North American manufacturers through November of ’09, convertible production by American manufacturers is at its lowest point having dropped from 200,000 units four year previous. This reduction has caused a blow to manufacturer’s business, hence the situation with Edscha.

Amidst drastic sales declines, GM was forced to cut the Pontiac Solstice, Saturn Sky, and Cadillac XLR from its lineup, all of which had their tops supplied by Magna.

The Magna tops are planned to be produced at the company’s plant in Bowling Green, Kentucky.

The original production date was slated for Q1 of 2011, but that seems to have been pushed back to the second half of 2011.

Magna currently sits atop Automotive News’s list of the 150 largest suppliers in North America with sales of $11.42 billion in 2008.

-By Stephen Calogera

Source: Automotive News

Ford was the only Motown manufacturer with enough fiscal health to avoid bankruptcy this past spring, and that has put them at a competitive disadvantage, according to CEO Alan Mulally, though he also told reporters at the 2010 Washington Auto Show that the benefit derived from Ford avoiding the aid taken by GM and Chrysler is far greater than any disadvantages.

As a result of the protections and benefits available under the shelter of bankruptcy, GM and Chrysler were able to rework the liabilities side of their balance sheets and as a result, were able to drop their costs. GMAC also received money from the administration so that they may lend to to GM and Chrysler consumers and dealers alike.

Chrysler emerged from bankruptcy debt-free, and GM owed $8.1 billion, which it intends to have paid back by June. Ford on the other hand, was holding $26.9 billion in debt at the end of the third quarter, and incurred a $214 million expense by way of the interest owed on that money.

While Ford is paying back their loans, Mulally pointed out that against GM and Chrysler, Ford is “at a little bit of a disadvantage on the cash side.” Mulally mentioned that as Ford’s cash flow improved they plan to more aggressively work towards improving their balance sheet.

-By: Stephen Calogera

Source: freep.com

Nissan officials said Monday that we can expect to see an addition to their crossover lineup with the introduction of the Nissan Juke this September. Built on the same platform as the Nissan Versa, the Juke will supplant the Rogue as Nissan’s entry-level crossover. Much of the styling detail is borrowed from the Qazana concept that Nissan showed in Geneva this past march.

During a meeting with journalists on Monday at the 2010 North America International Auto Show, Nissan Americas Chairman Carlos Tavares said “We are doing so well with the Rogue that there is no reason to think we won’t do better with the additional of a smaller crossover,”

In addition to the Juke, Nissan has seven launches planned for 2010 including the Nissan Leaf in December and a 40th-Anniversary edition of the Z. The 2011 Infiniti QX will debut at the 2010 New York Auto Show.

-By: Stephen Calogera

Source: Automotive News