Automobile Industry 01 (Aug 08 - Sep 15)

[millionairemind]

Chrysler talks collapse, bankruptcy imminent: WSJ
By Michael Kitchen
Last update: 12:20 a.m. EDT April 30, 2009

LOS ANGELES (MarketWatch) -- Talks between the Treasury Department and lenders aimed at keeping Chrysler LLC out of bankruptcy broke down Wednesday, making it all but certain the car maker will file for Chapter 11 protection Thursday, The Wall Street Journal reported late Wednesday, citing people familiar with the discussions. Administration officials, who have been braced for a Chrysler bankruptcy filing for weeks, say all the pieces are in place to get the country's third-largest employer through the court quickly, perhaps in a matter of weeks, the report said. End of Story

[kennynah]

if chrsyler peng san.... who will benefit ??? GM, Ford, and matchbox marcidee

[mocca_com]

Pender: Will Ford benefit from bankruptcies?
Kathleen Pender

Sunday, May 3, 2009

Will Chrysler's bankruptcy and a possible bankruptcy filing by General Motors help or hurt Ford, the only U.S. automaker that has not accepted a government bailout?

Normally, when a company files for bankruptcy, others in the industry benefit "because it takes out a competitor," says Jesse Fried, a bankruptcy-law professor at UC Berkeley. Even if the failed company attempts to reorganize, "it usually shrinks and becomes a less potent competitor," Fried says.

Yet in some industries, notably airlines, bankruptcies seem to beget bankruptcies.

One theory is that companies with high fixed costs, such as airlines, can reduce them in bankruptcy by shedding debt and restructuring union contracts. That allows them to charge lower prices, which drives other competitors into Bankruptcy Court to reduce their costs.

Automakers, like airlines, also have high fixed costs including union contracts.

But this idea of a bankruptcy virus "has never been proven," says Lynn LoPucki, a UCLA bankruptcy-law professor. Companies sometimes follow each other into Bankruptcy Court simply because "the economics of the industry put pressure on everybody."

LoPucki adds that bankruptcy "comes with a lot of downsides."

A big one: Customers don't like to buy from bankrupt companies. The government is trying to lure them by guaranteeing new-car warranties on Chrysler and GM vehicles purchased between March 30 and whenever the companies secure permanent financing or emerge from Chapter 11. But buyers still might avoid Chrysler vehicles out of fear they will depreciate faster than others or that parts won't always be available.

Chrysler hopes to mitigate the downsides of bankruptcy by getting out within 60 days. It filed for Chapter 11 on Thursday after it could not reach a deal with its secured creditors who have not taken government money. It will idle production while it is in bankruptcy. When it emerges, the United Auto Workers retiree health fund will own 55 percent of Chrysler, Italian automaker Fiat will own 20 percent (which could go to 35 percent), the U.S. government will own 8 percent and the Canadian government will own 2 percent.......

http://www.sfgate.com/cgi-bin/article.c ... 17CSR8.DTL

[helios]

well ...

we would have more Chinese Automobile Brands that emerges out as winners; it's the same "algorithm" for the RMB currencies story.

[winston]

Economy bottoming mah...

Toyota reports a first-ever annual net loss of $4.4 billion, the latest automaker hit by the credit crisis.

[winston]

China's vehicle sales jumped 25 percent in April from the year before to a record monthly high of 1.15 million units, according to industry figures released Friday.

Passenger car sales surged 37 percent over a year earlier to 831,000, outpacing U.S. sales in April of 820,000 units, according to figures from the China Association of Automobile Manufacturers.

After slowing late last year as the impact from the global financial crisis deepened, China's auto sales have risen for five straight months. In March, vehicle sales hit a monthly record high of 1.11 million units.


– Associated Press

[millionairemind]

I have been watching Obama's policy towards green energy since he came on board. Alot of his ideas seems to come from a book by Tom Friedman called Hot, Flat and Crowded - Why We Need a Green Revolution - And How it Can Renew America.

Obama wants 35 mpg by 2016, Greens score a huge win

Posted by: David Welch on May 18

Environmental lobbyists scored a big victory on fuel economy rules. President Obama is expected to announce tomorrow that he will boost the nation’s average fuel economy for new models just north of 35 miles per gallon by 2016. That’s about four years earlier than the Bush Administration originally proposed and similar to new greenhouse gas rules that California wanted to put in place on its own.

Here’s where the green lobby showed some real savvy. They knew they couldn’t get the Bush Administration to pass tougher rules. But groups like the Sierra Club figured they could get California to bite. So in 2002, they got California Senator Fran Pavley to sponsor a bill that would put tougher rules in place to govern carbon dioxide emissions. California has long had its own rules to govern emissions and pollution. But carbon dioxide can’t be scrubbed or filtered like other pollutants. You can only cut emissions by burning less gasoline. So any rule restricting it is a de facto rule on fuel economy. The industry tied the California proposal up in court, hoping to keep the feds from granting California a waiver.

Even Toyota opposed it, saying they didn’t want two standards, one for California and the states in the Northeast who follow its lead, and one for the rest of the country. So the new rule is a compromise that adopts rules as stiff as California wanted for its carbon dioxide targets but lets the federal government enforce it. And it’s one rule for the U.S., which makes planning new models easier.

The problem for carmakers is that the “one standard” is the toughest Obama could have picked. And the green groups knew they would get their way. See, New York, New Jersey and the New England states often follow California’s lead. Add them all up and it’s not far from half the car market. No carmaker wants to engineer two cars for the same market, so the industry pushed for one standard. Since Obama owes California and the Northeast his election, he was bound to side with them. He said he would when he campaigned. Plus, two of Detroit’s Big Three-who have been the political foes of fuel economy rules—are getting loans from the government and can’t fight tougher regs. It all came into place for environmentalists.

Carmakers will find a way to meet the new rules. Some will use hybrids or direct-injection gasoline engines and turbo chargers. We’ll even see more diesel engines. The question is, how will carmakers make a buck on these new efficient models? Hybrids and clean diesel engines can add thousands of dollars in cost. With cheap gasoline, consumers won’t pay up for it. The industry will have to raise prices, but getting enough of a hike to make a profit on green technology has been elusive since hybrids first went on sale. Green profits will be until gasoline prices rise again.

[eauyong]

Fiat, Guangzhou Auto plan 4.3b yuan Panyu deal

Kandy Wong
Updated on May 18, 2009
Details buried in official websites indicate that Fiat's proposed joint venture with Guangzhou Automotive Industry Corp would spend 4.3 billion yuan (HK$4.9 billion) to make 140,000 passenger cars a year at a plant to be built in Panyu in Guangdong.

The deal, Fiat's second joint venture on the mainland after its failed co-operation with Nanjing Automobile Group, is expected to be approved soon by the National Development and Reform Commission.

Specifics of the joint venture, which also plans to make 220,000 engines a year, appeared on the websites of the Ministry of Environmental Protection and Guangzhou. The proposed plant in Panyu must first secure approval from the environmental bureau for construction. The joint venture must then be approved by the NDRC.

It is not clear what kind of passenger car the two manufacturers would make, but it is likely to be a Fiat model because the Italian firm wants to take advantage of Guangzhou's distribution network.

The deal would give Fiat, which hopes to join the ranks of the world's top carmakers, a footprint in three key vehicle markets - Europe, the United States and China.

The carmaker recently took a 35 per cent stake in Chrysler and showed interest in acquiring General Motors Corp's German business Opel. It hopes to restart operations on the mainland soon, having parted with Nanjing Auto in 2007.

"The application to set up the joint venture may be approved by the NDRC as early as this month," said a source at Guangzhou Auto.

Fiat began working with Guangzhou Auto in September last year on an unspecified technological tie-up that later led to talks about expanding the relationship into a joint venture.

"We're arranging manpower internally," the source said. "Once the joint venture wins approval, we will start work immediately [on building the plant]."

The Guangzhou carmaker already has joint ventures with Japan's Toyota Motor Corp and Honda Motor. It is also intensively building its own branded vehicle that it plans to roll out at the Asian Games in Guangzhou next year.

"We rely on Fiat a lot in developing our own-branded vehicles," said another company source, adding that this helps explain why the mainland's sixth-largest carmaker decided to have a third partner.

Global carmakers can only form partnerships with two mainland manufacturers, and they must be 50-50 joint ventures. However, domestic carmakers can work with more than two foreign firms.

Fiat set up its first 50-50 joint venture - Nanjing Fiat - with Nanjing Auto in 1999, producing the Palio, Palio Weekend, Siena and Perla.

Fiat chief executive Sergio Marchionne said in 2007 that the carmaker planned to invest €500 million (HK$5.25 billion) in Nanjing Fiat over five years to meet its 2010 sales target of 300,000 vehicles.

However, the 60-year-old Nanjing Auto was acquired by its direct rival, Shanghai Automotive Industry Corp, in December 2007 for 2 billion yuan.

The acquisition, which eliminated the Fiat connection, was part of the central government's efforts to consolidate the industry by merging weak carmakers into strong ones.

Copyright © 2009 South China Morning Post Publishers Ltd. All right reserved

[millionairemind]

Talk about a quick withdrawal .... one month and it is out of bankruptcy

http://online.wsj.com/article/SB124384378712871505.html
* JUNE 1, 2009, 4:47 A.M. ET

Chrysler Could Exit Bankruptcy Reorganization as Soon as Monday
By ALEX P. KELLOGG

DETROIT -- Chrysler LLC could exit bankruptcy reorganization as soon as Monday, after barely a month in Chapter 11 protection.

Judge Arthur Gonzalez of the U.S. Bankruptcy Court in Manhattan rejected arguments from some Chrysler creditors and dealers seeking to block the deal, noting in his 47-page judgment that Fiat SpA was the only viable alternative to the immediate liquidation of the company.

The ruling, which came just a month after Chrysler was forced to file for protection, is viewed as a partial dress rehearsal for the more complex reorganization of General Motors Corp., which is expected to file in the same court later Monday.

[winston]

It's Fun to Know: Popular Car Colors

Custom auto paint jobs may be hot these days - and manufacturers are getting in on the act by offering somewhat outlandish options. But standard finishes still dominate.

Industry watchers say that, because of the recession, consumers expect to be driving their cars for a long period of time - and they don't want to be stuck with a color they might eventually have trouble selling. That said, here are the top car colors in the U.S.:

White
Black
Silver
Gray
Red
Beige/Brown
Green
Yellow/Gold

(Source: MSN Autos)