Automakers Defend Dealership Cuts
Posted by admin on Jun 14, 2009
General Motors and Chrysler executives defended the closings of hundreds of dealerships Friday as House lawmakers questioned whether the decisions would save any money or help the troubled companies rebound.
“Many dealers and the communities they serve frankly feel blind-sided,” said Rep. Greg Walden, R-Ore.GM CEO Fritz Henderson told a skeptical House panel that the dealer cuts were “quite painful” but necessary to preserve over 200,000 jobs at GM’s remaining dealers.”In essence, this is our last chance,” Henderson told the House Energy and Commerce Committee’s oversight and investigations subcommittee.The committee released a GM document that provided a state-by-state list of 1,323 dealerships the automaker plans to wind down. Pennsylvania had the most with 90, followed by Ohio with 79, Illinois with 66 and California with 65. New York had 60 and Michigan, where GM’s headquarters is based, had 58 outgoing dealerships. Alaska was the only state spared.Chrysler Deputy CEO Jim Press said the cuts were “the most difficult business action” of his career but were among the shared sacrifices by the United Auto Workers union, bondholders and others needed to save the company.”Going through bankruptcy was not our choice,” said Press, who along with Henderson and the other witnesses were required to raise their right hands and testify under oath.House members expressed dismay at the closing of 789 Chrysler dealerships and plans by GM to shutter about 1,350 by the end of next year. They said many rural communities would be left without dealerships while thousands of jobs would be lost without any firm guarantees that GM and Chrysler, which have received billions in federal aid, would benefit long-term.”Who made the closure decisions? How were they made? When were they made? Who made the recent decisions to reverse closures of 41 dealerships?” said Walden.”When it comes time to purchase a new vehicle, many of my new constituents will abandon GM or Chrysler and go to whichever brand is still locally sold by a person they trust within their community,” said Rep. Bart Stupak, D-Mich., the subcommittee’s chairman.”How does it help to close profitable dealerships?” asked Rep.Diana DeGette, D-Colo., who said 14 profitable Chrysler dealerships were closing in her home state. Dealers said the closings of their stores risked putting 100,000 jobs at risk and charged the companies with failing to be transparent about how they reached their decisions. Many dealers said their stores had been performing well despite the economic downturn.”We have been GM to our community,” said Bob Thomas, owner of Bob Thomas Chevrolet-Cadillac in Bend, Ore. “Now it is a dark time when GM must abandon our town, our region and us.”Frank Blankenbecker III, the dealer-principal of Carlisle Chevrolet-Cadillac in Waxahachie, Texas, said he learned in May that his 83-year-old dealership would lose its Jeep store and his GM franchise agreement would not be extended. His voice cracking, Blankenbecker honored his father, a World War II veteran, by wearing his father’s Bronze Star lapel pin.”I am glad that he is not alive to witness this travesty. To have risked his life for a country that would do what they are doing would destroy him,” he said.Daniel Kiekenapp, general manager of Tacoma, Wash., Dodge, said he was puzzled when he received his termination notice from Chrysler because he had net sales exceeding $1.7 million last year and was the top Dodge dealer in western Washington last April.”We have been reduced to being a used car lot and a neighborhood automobile repair facility,” Kiekenapp said.The auto executives said their companies have been slowed by too many dealers, with many representing the same company often competing against each other for sales. Many dealerships date to the 1940s and 1950s, they said, when motorists lived farther apart and Detroit automakers dominated the U.S. market.Henderson and Press said after losing customers and market share to foreign competitors, their companies needed to scale back all their operations to become leaner and return to profitability. Press said the 789 discontinued dealers met only a portion of their minimum sales responsibility and represented 55,000 units of loss sales and $1.5 billion in lost revenue in 2008. Henderson said the dealership reductions would allow the company to reduce many dealer support programs such as incentives and help to dealers with their inventory resulting in annual savings of more than $2 billion a year.In total, GM is expected to reduce its dealer body by 2,500 through the shuttering of dealerships, anticipated attrition and the shedding of its Saturn, Hummer, Pontiac and Saab lines. Henderson told the committee that 856 dealers had appealed GM’s decision to sever ties.As of now, GM has reversed itself on 45 of them, he said. Italian automaker Fiat Group SpA closed a deal earlier this week to become the new owner of most of Chrysler’s assets, saving the company from liquidation. The new company will be called Chrysler Group LLC.GM filed for Chapter 11 protection on June 1 and the company hopes to emerge from bankruptcy as a new company in 60-90 days
Tags: Automakers Defend Dealership Cuts
With GM hurting, NASCAR says it’s open to more foreign automakers
Posted by admin on Jun 14, 2009
NASCAR says it would be open to other foreign manufacturers joining Toyota in stock car racing.
Chief executive Brian France says nothing is imminent but talks with several companies have been ongoing for a long time.
France spoke at Michigan International Speedway ahead of Sunday’s Sprint Cup race. He was asked about the likelihood of companies like Japanese manufacturer Honda and some German automakers eventually competing in NASCAR.
He says foreign companies are interested in developing the North American market and NASCAR is the “pre-eminent place to consider.”
“I’m not going to name names, but we have companies that are interested in particular in developing the North American market as robust as they can, and you are well aware as we are of the foreign manufacturers now producing cars here in America,” France said. “That was part of the rationale that Toyota used, that (being in NASCAR) helps them associate more with this market.”
France’s comments come on the heels of an announcement earlier this week by GM, which is reorganizing through bankruptcy, that it is making deep cuts in its support of NASCAR teams in Cup, Nationwide and trucks, the latest in a series of harsh economic news for the sport.
“Well, obviously … every (GM) program is affected and we’re no different,” he said. “We were hoping to have the most minimal of the impact with their decision to restructure their business. The details aren’t all out yet and exactly what that will mean to us, but, obviously, we are affected.
“I think our job now is to figure out how to be good partners with them. They’re trying to restructure their entire company to be a different company on the other side (of bankruptcy) and for us to be a part of that. And I think we will. I’m very confident that they’ll be in the sport for many, many years because it works well.”
GM’s Chevrolet brand competes in NASCAR, along with Dodge, Ford and Japanese automaker Toyota. All of them have been hit hard by the crumbling international economy and France left the door open for other manufacturers to become part of the sport.
Tags: NASCAR, NASCAR says it’s open to more foreign automakers, With GM hurting
Schwarzenegger Sides With Obama on Automakers’ Bailout
Posted by admin on Jun 14, 2009
California Gov. Arnold Schwarzenegger said he would support a bailout for the Big Three automakers backed by President-elect Barack Obama — if the industry reformed itself, suggesting autoworkers’ pay and benefits need to be cut back.
“It’s very important to not just put money in — let’s see if they’ve been fiscally responsible,” Schwarzenegger said of a proposal backed by Democratic leaders in Congress and Obama to bailout Detroit automakers.
“If you pay the autoworkers all of the benefits and all of those things, [those] are maybe too high,” he told me in an exclusive interview Sunday on This Week.
“Right now Germany and Japan and maybe other countries, they can build cars cheaper and they don’t have the overhead with the amount of what they pay to the workers, the benefits they provide.
In America you sell a car and you have $2000 of each car that just goes to benefits,’ Schwarzenegger said.
“So, I think that there is a way of reducing all of that, make them more fiscally responsible, and then if they have to act together and have renegotiated those [union] deals them you can go in there and help them out financially,” he said.
–George Stephanopoulos
Tags: Schwarzenegger Sides With Obama on Automakers' Bailout
V8-powered Ariel Atom 500 could cost at least $160k
Posted by admin on Jun 14, 2009
Even with the stock 300-horsepower Honda four, the Ariel Atom is a verifiable supercar-slayer. So when the British track-car manufacturer announced they’d be building a bonkers 500hp V8 version, our interests were piqued, to say the least. But if you were expecting a bargain, think again. The latest reports, quoting Ariel’s CEO Simon Saunders, indicate that the V8-powered Atom 500 will cost a very supercar-like £100,000, or about $160k in American greenbacks. At least.
That’s about three times the price of the four-cylinder Atom 300. So why the huge price increase? Well, for starters, earlier reports that the Atom 500 would use the RS Performance-sourced 2.4-liter 10,000 rpm V8 from the Caterham Levante have proven inaccurate, as Ariel will be producing its own custom engine. Based on two Suzuki Hayabusa blocks but with a high proportion of custom parts, the engine alone is said to account for about £30,000 (~$50k); add to that another £11,000 ($17k) for the custom six-speed gearbox, plus the Alcon brakes and various carbon-fiber body parts and the figures start to add up pretty quick.
Tags: Alcon, Ariel Atom, autos, Carbon Fiber, Shopping, Suzuki Hayabusa, transmission, V8-powered Ariel Atom 500 could cost at least $160k, Vehicles
2009 Superior 54 Sport Wagon
Posted by admin on Jun 14, 2009
After GM debuted the first Corvette in 1953 they introduced a show car named the Nomad which was essentially a Corvette wagon. It was a great concept that never made it to the assembly line, but it held a spot in the hearts of ‘Vette heads since then. Superior Glass Works has spent years putting together a plan and resources to bring you their tribute to the Nomad, the Superior 54 Sport Wagon. Featuring the classic styling of the original, but with a few modern touches including the C5 Corvette chassis. Want in? Have the $125k to drop? You need to act fast, there will only be 25 made.
Tags: 2009 Superior 54 Sport Wagon, autos, Chevrolet, Chevrolet Corvette, corvette, general motors, Makes and Models, Recreation, Vehicles