Spreading the Pain to Europe: Car Sales Fall 25.3% in November

If you still think the depression in new car sales is limited to the Detroit Three, or even to the U.S. market, you're not paying attention. JATO Dynamics, a global automotive data and intelligence firm, reports that sales in Europe fell 25.3 percent in November '08, compared with November '07, to 924,936 units. For the first 11 months, sales fell 7.1 percent, to 13.6 million. JATO cited Audi for losing only 1.1 percent in November, thanks largely to the new A4 sedan. Romania's Dacia, now run as Renault's bargain brand, posted a 27.9 percent increase, but that's mostly because the brand expanded its range with its new Sandero model. Small-volume Japanese and European brands also had increased sales: Nissan, up 9.9 percent, to 28,971, Mazda, up 2.4 percent to 5,356, smart, up 12.1 percent to 10,486, Subaru, up 10.5 percent to 4,439 and Jaguar, up 13.3 percent to 4,120. For reference, be aware that Chevrolet sold 9,469 Malibus in November (GM's only gainer), up 31.3 percent. For the first 11 months of '08, General Motors' European divisions sold 32,000 more vehicles than Renault, making it third in sales behind VW and Ford. It was the biggest loser in Europe in November, however, dropping it to fourth place for the month. Here's JATO's top ten for November: Volkswagen: 110,034, down 18.9 percent Ford: 80,979, down 16.3 percent Renault: 73,628, down 22.6 percent Opel/Vauxhall: 61,780, down 37.1 percent Fiat: 59,517, down 23.8 percent Peugeot: 58,948, down 23.8 percent Citroen: 55,441, down 24.3 percent Audi: 50,292, down 1.1 percent Mercedes: 45,460, down 22.2 percent BMW: 43,357, down 28.5 percent

President-elect Obama, Your New Chrysler 300 is, er, Fiberglass...for Now

DETROIT - Will Chrysler LLC be around long enough to build the 2011 Dodge Charger and Chrysler 300? (Editor's note, a present Chrysler 300 is pictured) Will Chrysler factories reopen after its extended holiday shutdown, which begins Friday? I don't know. Chrysler says it could be out of cash in weeks. I can't believe I'm saying this, but the future of those cars now seems to be in George W. Bush's hands, with less than four weeks left in his presidency. He's rumored to be considering a "controlled" bankruptcy? Detroit has been hanging by a thread for this?

As you may have read elsewhere, some of us in the moto-journo biz got an early preview of the next LX sedans Wednesday in Auburn Hills. Online car magazines not invited to the event reported on what we saw, based on reports by other journalists who were invited. Those leaky journalists told Jalopnik the future cars and trucks looked like "lipstick on a foam pig" and "smoke and mirrors."

Well, of course. They were full-scale fiberglass models. They're not scheduled for production until 2010, probably the third or fourth quarter if things get better, so nothing's been retooled to stamp actual '11 model sheetmetal. I found their designs to be impressive, and several colleagues agreed. The second-generation 300 and Charger could be to the first-generation cars what the current Cadillac CTS is to its predecessor. And by the way, General Motors showed journalists the new CTS two or three years early - the same sort of "smoke and mirrors."

The difference this time is that everything we saw in the last couple of days could go up in smoke. And don't misunderstand this: I can't vouch for the quality of any future Chrysler product, or say anything good or bad about the way these cars and trucks ride, handle, perform, hold themselves together. That's what first drives and comparisons are for. I can only tell you that Chrysler has quickly exorcized retired design chief Trevor Creed. Yes, he's been gone only a couple of months, but with Tom Gale hired on as a consultant when Cerberus took over, I doubt Creed had much authority while these models were being designed. There's not a hint of Dodge Avenger/Chrysler Sebring styling here. And virtually no hint of the concepts Creed foisted on us in the last few years.

I doubt these new cars and trucks would impress Nancy Pelosi or Harry Reid. They'd rather see electric cars or bio-diesels running on mulch. But Chrysler ought to show the new 300, at least, to President-elect Obama, who owned an '05 300C. Attractive, desirable product could make a bigger impression than any "turnaround plan" or union concessions.

Why did Chrysler show us these 2011 models? To prove it's not quite dead, and to give us a reason to root for its survival through 2010. If its future stuff looked like more Avenger/Sebring, I'd be saying as much right now.

Why did Chrysler refuse to invite Jalopnik and Autoblog? Automakers worry that automotive websites are quick to spread leaks, even when they're not necessarily the first entity responsible for such leaks.

That kind of thinking is obsolete. Most of us at the Chrysler preview, some in print journalism and some not, also post online news and columns like this one.

While they would like to be considered part of the New Media, Jalopnik, Autoblog and others have become as entrenched in the moto-journo establishment as motortrend.com. I'd find it more interesting to hear what they think of the '11 300/Charger firsthand than read about the impressions leaked to them by invited journalists eager to pander to Jalopnik's irreverent image.

Bush Saves GM and Chrysler at the Last-Minute, for Obama

DETROIT - The city is shutting down thanks to a snowstorm that will keep at home those who weren't already on an early Christmas vacation. The pall cast over Metro Detroit for the last couple of months has lifted a bit, as President Bush announced Friday morning short-term loan guarantees of up to $17.4 billion to limp General Motors and Chrysler LLC into next March. The money, $13.4 billion now and another $4 billion available in February, will come from the $700-billion Troubled Asset Relief Program fund. There will be no forced bankruptcies, for now. No car czar was named; that was left for President-elect Obama to decide.

Bush said that "allowing the U.S. auto industry to collapse is not a responsible decision," at his brief White House news conference Friday morning. He cited the recent financial crisis as the reason for the U.S. auto industry's sudden decline and said that letting the car companies fail "could send our suffering economy into a deeper and longer recession."

Terms of the agreement give GM and Chrysler three months to restructure into viable companies, Bush said. The loans, he added, will provide for an orderly Chapter 11 process and a better prospect for success.

If GM and Chrysler can't present viable plans for turnaround by March 31, they will have to repay the loans. Bondholders are expected to convert auto company debt into capital. Everyone in the industry must make sacrifices, Bush said, including management, labor, creditors, bondholders, dealers and suppliers. The lame-duck president wants United Auto Workers to equalize their contracts with that of non-union workers in foreign automakers' U.S. plants by the last day of 2009.

The Detroit Three quickly issued prepared statements.

Chrysler CEO Bob Nardelli:

"A letter of intent was signed which outlines the specific requirements that must be achieved. These requirements will require consideration from all constituents, requiring commitment first in principal, leading to implementation this coming year. Chrysler is committed to meeting these requirements."

GM (not attributed to a specific executive):

"This action helps to preserve many jobs, and supports the continued operation of GM and the many suppliers, dealers and small businesses across the country that depend on us."

Ford Motor Company CEO Alan Mulally:

(He reiterated Ford's request for a $9-billion credit line.) "The U.S. auto industry is highly interdependent, and a failure of one of our competitors would have a ripple effect that could jeopardize millions of jobs, and further damage the already weakened U.S. economy."

Bush's "bailout" came a week after Senate Republicans torpedoed a House bill that would have provided the same amount from the Energy bill high fuel-mileage technology ("136") funds. The White House is probably unaware of the fact that also on Friday morning, Toyota Motor Company announced it would post a loss this fiscal year (ending March 31, 2009) for the first time in its 71 years. What happens next is that the Obama administration will have to complement further assistance for the Detroit Three with an economic stimulus package. His proposed federal works program would be a start. No one is buying cars. That will have to change before GM, Chrysler, Ford and even Toyota are restored to full health.

Below are the complete official statements from GM and Chrysler in the wake of the announcement:


GM Statement on Administration Providing Bridge Loan to Domestic Auto Industry

We appreciate the President extending a financial bridge at this most critical time for the U.S. auto industry and our nation's economy. This action helps to preserve many jobs, and supports the continued operation of GM and the many suppliers, dealers and small businesses across the country that depend on us.

This will allow us to accelerate the completion of our aggressive restructuring plan for long-term, sustainable success. It will lead to a leaner, stronger General Motors, a GM that is:

*dedicated to great products, exciting design, and world-class quality

*fully committed to leading in energy-saving vehicles and technologies,

*responsive to the needs of our customers, our stakeholders and the communities we live in and serve.

We know we have much work in front of us to accomplish our plan. It is our intention to continue to be transparent as we execute our plan, and we will provide regular updates on our progress. We again thank the Administration for this important support of our industry at this challenging time, and we look forward to proving what American ingenuity can achieve.

Chrysler LLC Thanks the Administration and Treasury for Their Confidence

Auburn Hills, Mich., Dec 19, 2008 - Chrysler LLC Chairman and CEO Bob Nardelli said on behalf of the men and women of Chrysler and its extended enterprise, that he would like to thank the Administration and Treasury for their confidence in the Company.

”A letter of intent was signed which outlines the specific requirements that must be achieved,” said Nardelli. “These requirements will require consideration from all constituents, requiring commitment first in principal, leading to implementation this coming year.

Chrysler is committed to meeting these requirements."

Nardelli said the Company would remain focused on its challenge and this initial injection of working capital would help bridge the liquidity crisis the industry is facing and assist in helping return Chrysler to profitability.

Beware the Ides of March 31: Toyota's Reversal Proves it's About More Than Cars

DETROIT - So March 31 turns out to be the big day. It's the day Toyota Motor Company expects to post its first-ever loss, $1.66- to $1.68-billion for the fiscal year, depending on whose rounding and yen-to-dollar conversions you believe. Toyota President Katsuaki Watanabe's (pictured) latest forecast reverses an earlier profit prediction of a positive $6.8 billion for the fiscal year ending March 31, 2009. That's also the day General Motors and Chrysler LLC have to present yet another set of "turnaround plans" to the federal government in exchange for $13.4-billion worth of loan guarantees that President Bush just approved (plus another $4 billion available in the first full month of President Obama's administration). If the feds aren't satisfied with GM and Chrysler's plans, it can call back the loans and possibly force one or both automakers into bankruptcy. Who will make that determination? Since the Detroit Duo are getting their bailouts from the Treasury department's $700 billion Troubled Asset Relief Program (TARP) funds, Secretary Henry Paulson is the de facto person in charge of these short-term loans. Most likely, the real person in charge will be Obama's proposed "car czar," though there are indications the president-elect won't name anyone until well into March. The good news is that Bush's loan guarantee plan gives GM and Chrysler (and Ford Motor Company, if and when it needs a requested $9-billion line of credit) a lot of latitude in their plans. Someone in the Obama administration, or perhaps on Capitol Hill, will have to decide whether or not GM and Chrysler met their requirements. Bush wanted them to provide plans that would include concessions from unions, suppliers, dealers and creditors, the last of whom are asked to convert bonds into equity. The bad news is that the California Democrats in control of Congress will push for more fuel-efficient, green cars. I don't have any problem with fuel-efficient, green cars, but the first thing the automakers need to do is make it to 2010, when cars like the Chevrolet Volt are scheduled to launch. Before word of the Bush loan guarantees, GM indicated it would delay retooling a Flint, Michigan, factory that would make the extended range electric Volt's internal combustion engine, which of course was a ploy to get the money. The point is, automakers don't have money to build money-losing new technology cars anymore than the average consumer has $40,000 to pay for a Chevy. The next time GM's Rick Wagoner, Ford's Alan Mulally and Chrysler's Bob Nardelli sit before a House or Senate committee, probably for a round of longer-term loans, they'll be able to point to Toyota's own problems in the current market, both in the U.S. and globally. With some $95 billion in capitalization, Toyota won't be begging for emergency funds anytime soon. Still, Detroit can talk of how Toyota first planned to convert a Mississippi plant originally meant to build SUVs to Prius production. And how after Prius sales dropped in half last November, Toyota put those plans on hold. They can tell Congress that it's not about fuel mileage anymore. It's about a lack of consumer confidence.