Chrysler has been harshly criticized by analysts and the media. And with good reason. It's lost a ton of sales and market share. It had to bail out of leasing when its residuals plummeted. It came up $6 billion short trying to renew its credit lines. And its debt rating is pure junk.
Ever since Cerberus took Chrysler private they've only doled out dribs and drabs of information about the company. So analysts and reporters (including me!) rushed in to fill the vacuum, mostly with negative news. That woke the company up to the fact that it better start communicating with the outside world.
And that landed me an interview for Autoline with Tom LaSorda, the vice chairman of the company, who offered up a lot more information than I ever expected.
Uh-oh. In the pell-mell race to develop lithium-ion batteries for plug-ins, EV's and hybrids, has any automaker taken a hard look at where all that lithium is going to come from? Guess what? Not only are global lithium supplies pretty tight, prices are about to skyrocket.
Today, the United States imports almost all of its lithium. We get most of it from Chile, then Argentina, and a little bit from Canada and Zimbabwe. The only producer in America is actually a German company, Metallgesellschaft, which has a mine in Nevada. Yet, even though we import most of our lithium, the United States is the world's largest processor of the material.
John McElroy is host of the TV program "Autoline Detroit". Every week he brings his unique insights as an auto industry insider to Autoblog readers. Follow the jump to continue reading this week's editorial.
2010 is shaping up to be a pivotal year in the American auto industry. From a product standpoint there will be a lot of interesting hardware in showrooms, including range-extending EVs, plug-in hybrids, clean diesels, pure electrics, and flex-fuel vehicles running on cellulosic ethanol. But it's also shaping up to be the year when the domestic industry will have to deal with its greatest challenge ever.
In short, the "Big Three" are running out of money, and running out fast. At its present spending rate, General Motors will burn through almost all the cash it has in the next 6 quarters. Ford can hold out a little bit longer. And Chrysler? Well, who the hell knows what's going on there?
John McElroy is host of the TV program "Autoline Detroit". Every week he brings his unique insights as an auto industry insider to Autoblog readers. Follow the jump to continue reading this week's editorial.
Every day Chrysler LLC builds Euro-spec versions of the Chrysler 300 at its assembly plant in Canada, bolts a V6 diesel engine into most of them, and ships them off to Europe. That diesel 300 gets better fuel economy, over 30 mpg, than all the other vehicles in Chrysler's U.S. showrooms. But it's against the law for Chrysler to sell that car in America.
Right now Ford and General Motors are trying to figure out how to bring many of their fuel-efficient European models to the U.S. and manufacture them here. They'd love to do it immediately, but it will take them several years to modify, test and validate those designs before they can meet U.S. regulations. Until they do, it's illegal to sell those cars in America.
Anybody else out there agree with me that this is crazy? Let's let automakers bring their fuel efficient European cars over here immediately. As long as a car meets the Euro 5 emission regulations and the latest European NCAP safety standards, we ought to let them build those vehicles in the U.S. with no other modifications.
John McElroy is host of the TV program "Autoline Detroit". Every week he brings his unique insights as an auto industry insider to Autoblog readers. Follow the jump to continue reading this week's editorial.
As car sales continue to spiral downward, some product planners in the industry are beginning to ask the unthinkable: is the American car market going to shrink permanently?
They are starting to consider the possibility that the days of selling 17 million new vehicles every year are over, and that going forward the American auto market is going to be smaller.
There are a number of reasons why product planners are beginning to contemplate this possibility, but the two biggest causes are the high cost of oil and the skyrocketing costs of regulations. Amazingly, even though raw material costs are soaring at rates never seen in a century, the car companies say that pales in comparison to cost pressures they're grappling with due to CAFE, the California CO2 standard, and upcoming safety standards.
Whatever the cause, if, and I emphasize if, the U.S. car market is indeed going to be smaller in the future, that would have a drastic and painful impact on the manufacturing base in the country.
John McElroy is host of the TV program "Autoline Detroit". Every week he brings his unique insights as an auto industry insider to Autoblog readers. Follow the jump to continue reading this week's editorial.
Billionaire oil tycoon T. Boone Pickens rocked the automotive and energy industries this week with a bold plan to drastically reduce America's dependence on imported oil. His plan, in case you missed it, is to build massive wind farms to produce electricity, and to stop making electricity from natural gas. Then he wants to divert that natural gas to be used in cars and trucks.
Doing so, Pickens argues, would allow the U.S. to reduce its use of imported oil by 30 percent. Natural gas proponents point out that it burns far cleaner than gasoline, that we have abundant domestic reserves, and that depending on where you live, it sells at the equivalent of $1.50 for a gallon of gasoline.
Mr. Pickens may know a lot about the oil and gas industry. But getting people to buy cars that can run on natural gas may not be as easy as he thinks.
A decade ago General Motors put one of the coolest cars of all time on the road, the EV1. While there were a number of hard-core EV enthusiasts who became passionately committed to the car, it never caught on with the masses. But that was then and this is now. GM should seriously consider putting the EV1 back into production.
John McElroy is host of the TV program "Autoline Detroit". Every week he brings his unique insights as an auto industry insider to Autoblog readers. Follow the jump to continue reading this week's editorial.
With gas prices soaring and SUV sales sinking, General Motors just put its HUMMER brand under "strategic review." That's generally the term used when a company is getting ready to dump a brand. And that begs the question, how many brands does a car company really need?
There are a number of companies that have multiple brands, like GM (Chevrolet, Pontiac, Buick, Cadillac, GMC, Saab, Saturn, Opel, Holden, Vauxhaul), Ford (Ford, Lincoln, Mercury, Volvo), Fiat (Fiat, Alfa Romeo, Lancia, Ferrari, Maserati) and Volkswagen (VW, Audi, Seat, Skoda, Lamborghini, Bentley, Bugatti). Some of these brands are strong and successful. Some are not.
The big, successful automakers these days seem to have only two brands, a mass market brand and a luxury one. That's the model Toyota, Honda, and Nissan are following. And that sure seems to be the business model that will work best for the foreseeable future.
John McElroy is host of the TV program "Autoline Detroit". Every week he brings his unique insights as an auto industry insider to Autoblog readers. Follow the jump to continue reading this week's editorial.
It could be the most dramatic retooling effort since the early days of World War II, when Detroit earned its nick name as the Arsenal of Democracy. Word leaked out yesterday that Ford is calling its plant managers and top union leaders to the company's headquarters in Dearborn, Michigan to debrief them on an ambitious plan to revamp its manufacturing plants. Ford wants a crash program to change over many of its truck plants to produce fuel-efficient passenger cars.
The urgency conveyed by this development (the company will not yet officially confirm it) is due to the surge in gasoline and diesel prices that have decimated truck sales. Never has there been seen such a dramatic shift in customer demand in such a short period of time. Last month sales for the Detroit Three absolutely collapsed, and when sales are tallied for this month, the carnage is going to be worse.
Realizing that any delay could permanently cripple the company, Ford's CEO Alan Mullaly decided to embark on a bold effort to achieve a rapid change over. Hence, the unprecedented call to bring all the plant managers and top union reps together for an emergency meeting.
John McElroy is host of the TV program "Autoline Detroit". Every week he brings his unique insights as an auto industry insider to Autoblog readers. Follow the jump to continue reading this week's editorial.
Ooof! May sales were like a punch in the stomach, especially to the Detroit Three. It's been nearly three decades since we've seen their sales collapse so dramatically.
Last month the annualized sales rate of the American market, including all automakers, fell to only 14.2 million units. That means if sales keep on going like they did in May, the industry will only sell 14.2 million units this year. Remember, as recently as 2006 this industry sold over 17 million.
That drop off of nearly 3 million vehicles translates into the equivalent loss of: 12 assembly plants 6 engine plants 6 transmission plants 5 stamping plants Dozens and dozens of component plants
That also translates into an estimated loss of about 65,000 jobs. In only two years time!
John McElroy is host of the TV program "Autoline Detroit". Every week he brings his unique insights as an auto industry insider to Autoblog readers. Follow the jump to continue reading this week's editorial.
Chrysler has been harshly criticized by analysts and the media. And with good reason. It's lost a ton of sales and market share. It had to bail out of leasing when its residuals plummeted. It came up $6 billion short trying to renew its credit lines. And its debt rating is pure junk.
Spy Shot: Production interior of Chevy Volt (maybe)
Rumormill: Lexus LF-A... Stillborn?
Ford reveals 2010 Mustang badge
REPORT: Chrysler may sell Dodge Viper rather than kill it
Audi develops R8 GT3 racer
In the Autoblog Garage: 2009 Nissan Murano
In the Autoblog Garage: 2009 Dodge Journey R/T
In the Autoblog Garage: 2008 Jeep Compass Sport 4x2
In the Autoblog Garage: 2008 Porsche Carrera S
First Drive: 2009 Honda Fit Sport
