By Chris Sorensen - Tuesday, January 15, 2013 - 0 Comments
Since 2009, the Detroit auto show has been mostly about cars—the smaller, the better. After being caught flat-footed by the recession and a big spike in gasoline prices, the former Big Three—Ford, GM and Chrysler—were eager to show the U.S. government and taxpayers (which bailed out GM and Chrysler) that they knew how to build more than hulking pickup trucks and gas-guzzling SUVs. Hence, the spotlight was on small cars like the Chevrolet Cruze, Ford Focus and Dodge Dart, while the heavier pieces of metal were parked off to the side.
Not this year. All three automakers are turning their attention back to bigger vehicles—namely pick-up trucks. GM is showing off its new 2014 Chevrolet Sliverado 1500 and its sister model the GMC Sierra. Ford, meanwhile, has a burly Atlas pick-up concept that is believed to represent the future look of its best-selling F-150.
In part, the renewed focus on pick-ups reflects a need to refresh models that haven’t seen a major update in several years (although that didn’t stop the F-150 and Silverado from claiming the top two sales spots in the U.S. last year by a significant margin). It’s also timed to coincide with the rebound in the U.S. housing market, which is expected to draw contractors and other construction types back to showrooms. But mostly it reflects a reality of the U.S. auto business that was swept under rug for political reasons in 2009, but remains as important to the Detroit Three’s bottom lines as ever: Americans like to drive trucks.
By Tamsin McMahon - Tuesday, November 13, 2012 at 7:00 AM - 0 Comments
Three years on, the debate over whether saving Detroit was worth it still rages
In any other industry, the announcement that a U.S. company was expanding sales to China would be hailed as a triumph of American capitalism. But in North America’s auto industry, the news that Chrysler was planning to build Jeeps in China—which it hadn’t done since emerging from the brink of collapse in 2009—was met with a heavy dose of skepticism. “Obama took GM and Chrysler into bankruptcy and sold Chrysler to Italians who are going to build Jeeps in China” was how a Republican campaign ad characterized the move by Chrysler’s Italian majority shareholder, Fiat S.p.A.
The theory was quickly debunked by Chrysler CEO Sergio Marchionne in a letter to employees explaining that a surge in North American Jeep production—nearly tripling since 2009—had been crucial to Chrysler’s quick turnaround and was central to the company’s long-term growth. “I feel obliged to unambiguously restate our position,” he wrote. “Jeep production will not be moved from the United States to China.”
But the argument had traction. By the time Donald Trump posted on Twitter the now-popular view that “Chrysler wants to send all Jeep manufacturing to China,” the carmaker had dropped all pretence of eloquence. “You are full of s–t,” was how the company’s senior vice-president of design, Ralph Gilles, responded to Trump on Twitter. Continue…
By macleans.ca - Tuesday, September 11, 2012 at 12:14 PM - 0 Comments
New rules say that cars must improve fuel efficiency, but will consumers buy them?
Expect to see a lot more electric and hybrid cars on the road in the coming years. Washington recently announced new rules that cars must have almost double the current fuel economy standard of 29 miles per gallon by 2025. Ottawa quickly said it will follow suit with common standards. (The Canadian equivalent would mean moving from 6.6 to 4.4 litres per 100 km). What’s good for the environment, however, is creating something of a dilemma for automakers. They need to continue making big investments in green technology to meet the new requirements, but as yet haven’t found much of a market for green cars. Consumers remain fiercely loyal to the old-fashioned internal combustion engine. In Canada, just 0.03 per cent are buying electric cars. General Motors expects to sell 2,500 plug-in hybrid Chevy Volts in August—its highest monthly rate since the model was introduced in 2010. With sales falling short of projections, GM is shutting down production for four weeks. Sales of Nissan’s electric Leaf, meanwhile, are down 26 per cent from last year. Carmakers will continue making electrics and hybrids—last month Ford said it is hiring dozens more engineers for that purpose—but for now, it won’t do much for the bottom line.
By Tamsin McMahon - Wednesday, June 13, 2012 at 6:00 AM - 0 Comments
Cassels Brock and Blackwell LLP is suing more than 100 lawyers in an epic battle unlike any before it in Canada
The Canadian legal profession has always seemed, at least from the outside, a rather gentlemanly group. Barristers, after all, are still required to don the black robes of old England to attend higher courts. So when one of Canada’s largest and most storied law firms launched an epic battle against more than 100 other lawyers, it started a scrap of the sort rarely seen in this country.
Last month, Cassels Brock and Blackwell LLP, a Bay Street firm with a roster that includes former Ontario premiers David Peterson and Mike Harris, began serving dozens of lawyers with notice of a lawsuit. The lawyers—164 in all—range from partners in some of the country’s biggest law firms to more than a dozen one-man shops in places like Morris, Man., Bathurst, N.B., and Yorkton, Sask. In some cases, Cassels doesn’t even know who the lawyers are: 14 are listed in court filings simply as “John or Jane Doe,” including two “Doe Professional Corporations.”
Cassels’ suit is merely the latest development in a massive and complex $750-million class action case that revolves around the harried legal negotiations that all of the lawyers were involved in to restructure General Motors’ Canadian operations (including closing dealerships) in 2009 so the company could stave off a bankruptcy.
By Peter Nowak - Thursday, May 17, 2012 at 12:35 PM - 0 Comments
If Facebook were a fictional movie character, it would have to be Rocky Balboa. Like Sylvester Stallone’s underdog boxer, Facebook routinely gets its figurative face punched in, but somehow keeps on going. Whatever you think of the social-networking service, on the eve of its initial public offering–expected to be the largest ever for a U.S. tech company–it’s hard not to admire the company’s ability to roll with the punches.
Facebook has repeatedly sparred with watchdogs and users alike over its constantly changing privacy settings. Canada actually led the way, with Privacy Commissioner Jennifer Stoddart giving the web service a good spanking back in 2009, with other countries following suit. Even before that, the company caught heavy flak for its Beacon effort, an ad platform that displayed on Facebook users’ activity on other websites.
By Tamsin McMahon - Thursday, April 5, 2012 at 12:02 PM - 0 Comments
Automakers are flooding to the Deep South for cheap, union-free labour
When German executives from Volkswagen descended on Chattanooga, Tenn., last May for the grand opening of their $1-billion plant, they pointed to the warm Southern hospitality and the cultural amenities of life on the banks of the Tennessee River as key reasons for deciding to build their first North American auto assembly shop in 20 years on the site of a former wartime-era munitions factory in the Deep South.
Auto industry analysts pointed to other reasons the automaker chose Chattanooga: the region’s high unemployment and strong anti-union sentiment, which promised both a massive labour pool willing to work for cheap and more than half a billion dollars in government incentives—nearly $200,000 per worker. Luring Volkswagen, which promised to hire nearly 2,000 workers for as little as $14.50 an hour, was deemed a huge coup for the city of 170,000. Since the plant opened, the city’s unemployment rate has dropped from nine per cent to 7.3 per cent. Volkswagen-branded shirts became the city’s most coveted fashion item.
Volkswagen is merely the latest foreign automaker to target the southern U.S. for expansion into the North American market. It’s a trend that is profoundly reshaping the American manufacturing landscape, pushing the country’s auto belt south from Michigan and Ohio into the cotton fields and cow pastures of Alabama and Mississippi in search of cheaper labour and fewer costly union battles. It’s not the first time the industry has seen a shift to the South, as automakers decamped for places like Kentucky, Tennessee and Missouri in the 1980s in search of cheap labour. But the present-day move appears both more profound and more lasting. For every job created by foreign automakers, mostly in the South, the Detroit Three have shed six jobs, nearly half in Michigan, according to the Center for Automotive Research. It’s a push that now threatens the future of high-paying manufacturing jobs in Canada, and maybe even the future of unionized workplaces.
By Chris Sorensen - Thursday, October 7, 2010 at 10:40 AM - 0 Comments
With Ford set to retire the Crown Victoria, automakers are battling to build the next generation police car
For the first time in more than a decade, Dennis Simcoe won’t be able to simply pick up the phone and call Ford Motor Co. when it’s time to replace one of Edmonton’s 230 Crown Victoria police cruisers. That’s because Ford, which currently boasts 70 per cent of the North American police car market, is finally retiring the aging, tank-like police car next year, creating unease among police departments and an opportunity for competitors to step in. “It’s a very well-performing police vehicle,” says Simcoe, who oversees fleet operations for the city of Edmonton and already sounds a touch nostalgic for the Crown Victoria. “You can pound on them and they still keep ticking.”
For Ford, though, the “Crown Vic” lost its commercial appeal a long time ago. Built in St. Thomas, Ont., the car has been relegated to police and taxi fleets since 2007 after Ford decided the consumer market for big, rear-wheel-drive sedans had all but disappeared, save for a handful of Florida retirees. Even taxi companies are moving away to smaller and more fuel-efficient cars. And police departments, although important and high-profile customers, only buy about 60,000 of the roughly $30,000 vehicles a year in total—not enough to justify a dedicated assembly line.
Ford is now attempting to convince police to move to a car based on its front- and all-wheel-drive Taurus platform, as well as a sport utility vehicle, promising performance benefits that stem from modern vehicle stability systems and the improved fuel economy of a smaller but still powerful V6 engine. “We can add that advanced technology and maybe change the way people think about police cars,” says Marisa Bradley, a Ford spokesperson.
By Jason Kirby - Sunday, March 21, 2010 at 9:00 AM - 13 Comments
How Canada has recovered so quickly from the recession
At the end of 2008, with the global economy crumbling and forecasters trying to out-gloom each other with dire predictions of blood in the streets, Linda Hasenfratz was understandably anxious. As CEO of Linamar Corp., one of Canada’s largest auto-parts suppliers, she watched as GM and Chrysler, two of her biggest customers, careened toward bankruptcy. Meanwhile, analysts were warning investors that Linamar might breach the terms of its loan agreements. Shares of the Guelph, Ont.-based company plunged to $3.50, a depth not seen in nearly two decades. But rather than panic, Hasenfratz did what precious few people seemed capable of at the time. She stepped back and took a deep breath.
The auto sector was in serious trouble, she acknowledged, but car sales had fallen to “drastically, unbelievably unrealistic, totally unsustainable low” levels. And Linamar wasn’t about to go under, even if the Detroit giants went bust. “I knew it wouldn’t kill us,” she says. So in the darkest days of the credit-crunch-cum-financial-crisis-cum-Great Recession, Hasenfratz dipped into her family’s finances and bought a million Linamar shares, a resounding vote of confidence in the business and the economy as a whole.
What Hasenfratz was betting on, and what even the most pessimistic forecasters admitted would one day come, was a recovery. But who could have thought the rebound would be as quick and robust as this. Barely a year after stock markets looked like they were headed for a long-term rout, exchanges in New York and Toronto have leapt roughly 70 per cent. More importantly, most signs point to the recession having ended sometime last fall. In the fourth quarter the Canadian economy grew by five per cent, soundly beating expectations. So while Hasenfratz finds herself still bracing for a tough slog in the auto sector—the crucial American car buyer could take years to fully recover—she’s once again focused on the future and expanding her company into Europe and Asia. As for those Linamar shares she snapped up when the recession looked like it would last forever, “they’re about six times higher now,” she says, “but who’s counting?”
By Kate Lunau - Thursday, March 11, 2010 at 2:36 PM - 5 Comments
Thanks to a highly integrated industry, massive recalls shouldn’t be a surprise
First, it was Toyota issuing recall after recall. Then others, including Honda, Nissan, and General Motors, followed suit. With millions of vehicles from different auto manufacturers affected over the last few months alone, drivers could be forgiven for feeling nervous. But experts say these seemingly massive recall numbers shouldn’t come as a surprise.
Following harrowing reports of runaway vehicles, Toyota issued its largest-ever recalls, covering some 5.6 million vehicles in just the U.S. As executives were hauled before U.S. Congress, other automakers rolled out campaigns of their own (last week, GM recalled 1.3 million North American vehicles over faulty power steering). With Toyota drawing fire over its alleged foot-dragging on safety issues, rival automakers likely “didn’t want to be tarred with the same brush,” says Craig Hoff, a professor of mechanical engineering at Kettering University in Flint, Mich.
But the pile-up of recalls also shows how, in such a highly integrated industry, problems can spread like wildfire. In a growing trend, Toyota is one of several manufacturers using “the same platform—the underpinnings of a vehicle—across a variety of models,” Hoff notes. Some even share designs and parts with competitors, and are reducing the number of suppliers they deal with, creating even more overlap. France’s PSA Peugeot Citroën had to recall nearly 100,000 vehicles made in the Czech Republic, where it shares a factory with Toyota; and the Pontiac Vibe, sold by GM but jointly manufactured with Toyota, was also subject to a recall. This week, Daihatsu Motor, a subsidiary of Toyota, recalled 275,000 vehicles in Japan.
According to Tony Faria, an automotive expert at the University of Windsor, “today’s cars are as safe, or safer, than before.” But as companies move to an ever-smaller number of platforms and suppliers, he says, recall numbers “will keep getting bigger.” M
By Katie Engelhart - Thursday, March 4, 2010 at 10:00 AM - 1 Comment
Autonet plans to wire the world for Internet, one vehicle at a time
What do you get when you put a network guy and a race-car driver together? You get Internet in the car. So goes the well-worn joke around the San Francisco-based ofﬁce of Autonet Mobile, the brainchild of Sterling Pratz, a pro race-car driver, and Doug Moeller, a wireless whiz. In 2005, Pratz and Moeller came together with a shared vision—a world in which any person in any vehicle can have access to the Internet. Five years later and they’re well on their way, holding partnerships with Chrysler, Dodge, Jeep, Volkswagen and GM.
Autonet brings the Web to cars via what it calls its “TRU technology” routers. The routers, which can plug into a cigarette lighter, transform a vehicle into a WiFi hotspot, just like the one you might ﬁnd at a coffee shop. The company says its system has an advantage over laptop wireless cards because it can automatically shift between broadband towers when signals are weak, so service is never lost. Though only available in the U.S., Autonet hopes to expand into Canada by year’s end.
The market of connection-coveting clients is growing fast. Autonet fields daily calls from busy mothers, school bus manufacturers and ambulance responders. Kids can work on their laptops while riding the bus, and ambulance workers “can transmit things like EKG readouts to cardiologists,” says Christine Williams, a company spokesperson. (Driving and surfing the Web at the same time, however, is most definitely not recommended.)
By Jonathon Gatehouse - Thursday, February 25, 2010 at 8:00 AM - 8 Comments
The Right to Play CEO on how the charity is dealing with its banishment from the Games
Johann Olav Koss is an Olympic speed skating legend: the winner of four golds, including three in front of his home crowd in Lillehammer, Norway, in 1994. But to Canadians he’s perhaps better known as the CEO of Right To Play (or the former husband of Belinda Stronach).
He spoke to Maclean’s about how the charity, which focuses on improving the lives of children through sport, and is usually a fixture in the athletes’ village, is coping with its banishment from the Vancouver 2010 Games.
Q: Right To Play was born out of the Olympics, yet you are not officially allowed to be here. Did you ever get an explanation of why?
A: No. I got a letter saying they didn’t want to renew the contract. All the rest is speculation, but it clearly started with sponsorship confusion. [GM is an official Olympic sponsor; Mitsubishi is one of Right To Play’s backers.]
By Chris Sorensen - Thursday, February 18, 2010 at 3:00 PM - 8 Comments
The manufacturing heartland is ailing. Can it be saved?
The process of rebuilding after the Great Recession has begun in earnest inside a dingy mall in Oshawa, Ont. There, some 200 men and women pass through the doors of an employment “action centre” each week in search of a new job and, in some cases, a complete reset of their lives. Many are former auto workers laid off after General Motors shuttered its Oshawa truck plant and scaled back production at a neighbouring car plant last year. Others worked at parts companies. Few have easily transferable skills and many don’t even have a high school diploma.
Connie Snelgrove is the centre’s coordinator. She briefly worked for a supplier that built car seats, but lost her job in 2008. “I was only there two years, so I knew what the real world was—that everybody else [without skills or an education] is making $8 to $10 an hour,” says Snelgrove. “But these guys have been making good money and have been in the same environment for so long. I knew they were going to be in for a culture shock.”
Once comfortably part of this country’s large middle class—loosely defined as people who are neither rich nor poor and measured by things like a steady job, home ownership and a pension—thousands of Canadians are now turning to people like Snelgrove for help after losing their jobs and suddenly finding themselves on the margins of society. The fact that the employment upheaval, which cost nearly half a million Canadians their jobs over the past year, comes at a time when many households are carrying near record amounts of debt has only served to compound the financial pain, raising the risk of missed mortgage payments and bankruptcies.
By Chris Sorensen - Friday, January 15, 2010 at 9:00 AM - 7 Comments
After a horrid year, Detroit sees hope in a small, green future
There was a whiff of optimism, albeit of the cautious variety, mixed with the usual scents of rubber, new car and acres of indoor carpet at the Detroit auto show this year. After a brutal 12 months that saw sales plummet across North America and two of the former “Big Three” Detroit carmakers file for bankruptcy, auto executives were understandably eager to put the past behind them and get back to the business of selling cars, trucks and SUVs amid growing evidence of an economic turnaround.
While the show lacked the glitz and glamour of even just a few years ago—no trucks were dropped from the Cobo Center’s ceiling or cattle-herded through downtown Detroit—the cloud that had hung over last year’s displays lifted to reveal an industry that, if not completely transformed, believes that it’s finally found the right mix of smaller and greener cars to survive in the new and more cutthroat automotive landscape.
By Colin Campbell - Tuesday, December 8, 2009 at 1:45 PM - 0 Comments
Winners and losers in a big year for the auto industry
Forget the hybrid. This year, the American auto industry went back to doing what it does best: making affordable sports cars with big, throaty engines. The Ford Mustang, Chevrolet Camaro (above) and Dodge Challenger were all surprise hits for the Detroit Three. While overall car sales saw double-digit declines, muscle car sales jumped over seven per cent. Perfect for the driver who wants to get where he’s going fast—and preferably in a straight line.
A Swedish couple travelling in Italy planned to visit the idyllic Isle of Capri. Instead, they drove 650 km off course to the industrial city of Carpi. They had mistyped the destination into their car’s GPS device. “Capri is an island,” noted a local official in Carpi, in northern Italy. “They did not even wonder why they didn’t cross any bridge or take any boat.”
For the auto industry, the month of August stood out like a gleaming new Ferrari in a junkyard. That was when the U.S. government’s US$3-billion cash for clunkers program kicked into high gear and Americans were offered as much as US$4,500 to trade in their old cars for new ones. Car sales spiked and the entire North American economy was given a brief boost.
Toyota, perhaps best known for making reliable, if bland, family sedans, launched a US$375,000 supercar, the 552-hp Lexus LFA. Not to be outdone, Porsche introduced its first four-door sedan, the Panamera, which costs US$133,000 for the turbo version. Audi has a new version of its R8 supercar (above), the V10—a US$146,000 car that auto critic Jeremy Clarkson called “spectacularly good. It’s like Scarlett Johansson’s lips.”
Car doors have been an overlooked design element. But the doors of the new Mercedes SLS, which swing straight up, are a thing of beauty. This latest take on an old idea gives the car its moniker, the Gullwing. Swedish manufacturer Koenigsegg is also taking door design to a new level with what it calls the dihedral synchro-helix actuation system. The doors on its cars slide forward and away from the car, then pivot up. Somewhere, an engineer earned his keep.
Got a boost?
Chrysler disbanded the group of engineers working on its electric-car program. The world’s most hyped electric car, GM’s Volt (above), is still a prototype. Canada’s Zenn Motor Company said it was getting out of the electric-car-making business to focus on battery technology. The only real electric carmaker in North America is Tesla, with its $100,000 Roadster. Are electric cars the future? We’re still waiting.
The meltdown that industry watchers have taken to calling the Carpocalypse saw the demise of some much-loved brands. Saturn was dropped by GM, as was the storied Pontiac nameplate, despite its loyal following and a critically acclaimed new model, the G8 GXP. Rick Wagoner, GM’s long-time chief executive officer, also didn’t last (he was forced aside by the Obama administration). Car dealers felt the
sting, too—GM is shuttering 42 per cent of its Canadian dealerships.
The new BMW 760 Li (below) is a fortress on wheels. It is big, comes with a V12 engine, and features a host of high-tech features: night-vision technology, radar sensors to detect cars in its blind spot, and cameras on the front fenders to help drivers see what’s coming at intersections. Mercedes has a comparable monster, the S63 AMG. One advantage it has over the Bimmer: front and rear massaging seats. Both sell for about US$135,000 (chauffeurs not included).
It was a tough year for Formula One racing. Toyota announced that it would pull out of the circuit. Renault was found guilty of race-fixing. The good news: Jenson Button. The British driver came out of nowhere to win the world championship while driving for a brand-new team, Brawn GP. Asked to describe in three words what it’s like to be an F1 driver, he told the BBC, “Wow, wow, and wow.”
A driver crashed his $2-million Bugatti Veyron into a saltwater marsh near Galveston, Texas, after he said he became distracted by a low-flying pelican. In Peterborough, England, the driver of a $125,000 Lamborghini Gallardo (above) noticed smoke billowing from his car. He stopped to search for a fire extinguisher, but the vehicle burned to a blackened crisp. Both incidents ended up on YouTube. Lovers of fine sports cars quietly wept.
Ford’s new sonar-based parallel parking system can guide your big SUV into the tightest spots. It automatically steers; you simply work the gas and brake. Not to be outdone, Volvo has a system on its new XC60 in which the vehicle will automatically brake if you’re about to hit the car in front of you. Future young drivers rejoice—with cars like these, driver’s licence tests will be a snap.
By Jason Kirby - Friday, June 12, 2009 at 9:40 AM - 0 Comments
Across Canada, GM dealers vow they will live to sell another day
Moray Keith is the first to admit he’s seen better days for his chain of GM dealerships in Metro Vancouver. A few weeks ago, a white truck pulled up to the door outside the Dueck on Marine Drive showroom. A group of men in black shirts from Starbucks rushed in, and with no warning began tearing apart an in-store coffee outlet—part of that company’s downsizing efforts. Not only that, the air conditioner was on the fritz, and the building’s glass walls were heating up the showroom floor like a giant greenhouse. And then, of course, there was the small matter of that bankruptcy.
Car dealers are an inherently optimistic lot. But the past few months have been enough to test the mettle of even the most exuberant salesman. Car sales have collapsed, and after weeks of speculation, so too has the General, in a spectacular US$172-billion flame-out. Yet, across Canada this week, GM dealers like Keith (whose family owns three GM dealerships with total sales of around $400 million) remained remarkably upbeat about the upheaval going on around them. “I think it’s the best thing that could happen because you have people looking forward now at what GM is going to be like as a new entity,” he say. “In GM’s strong times, this store has always been the big store in Canada. We’d like to get back to that point.”
By Jason Kirby - Thursday, June 11, 2009 at 9:00 AM - 1 Comment
But will people refuse to spend once things improve? Plus what do you get when you mix a deep recession with Miley Cyrus?
Meet the Walkers. They’re the latest embodiment of the culture of thrift said to be sweeping America. And their story, after it was reported a few days ago in the Washington Post, lit up the Web as another sign that things truly have changed. You see, the old, conspicuous Walkers used to travel to the Caribbean, shop at Nordstrom, and tell friends all about their consumer exploits. Now, with money tight, Seigrid Walker has found joy in flaunting her frugality. They stay in, eat pizza, and watch Madagascar “over and over again.” Forget about keeping up with the Joneses. It’s all about keeping up, or is it down, with the Walkers.
Since the recession began, thrift has been touted as the new black. It’s more than a matter of trendspotting. Consumers make up 70 per cent of the U.S. economy. Any recovery is wholly reliant on them getting back into the malls. So when analysts tell us Americans are simply unwilling and unable to spend any more, the implications are dire. But there’s a huge gulf between unwilling and unable, and a recovery hinges on which one is truly the case.
By Andrew Coyne - Tuesday, June 9, 2009 at 3:15 PM - 959 Comments
GM workers: The cost of each job saved in Canada is $2 million
What is the cost of the federal and Ontario governments’ contribution to bailing out General Motors? We know what it is in dollar terms: $10.6 billion, or about one-fifth as much as the United States Treasury has kicked in. But how much is that?
Here’s one way to think about it. In exchange for their investment, the governments of Canada and Ontario will together receive 11.7 per cent of the equity in “New GM,” the slimmed-down company that, it is hoped, will emerge from Chapter 11 bankruptcy protection some months from now. On its last day of trading on the New York Stock Exchange, GM closed at US$0.75 a share, for a total market capitalization of about $494 million in Canadian funds. Subtract from that $10.6-billion price of the overall bailout package the roughly $1.6 billion in loans, and our governments paid $9 billion for an equity stake worth just under $58 million.
But it’s okay: over the next nine years, our governments have pledged to sell off their stake, a little bit at a time. So if the stock, say, quintuples in value in that period, we could get back as much as two cents on the dollar.
By Aaron Wherry - Tuesday, June 2, 2009 at 1:05 PM - 3 Comments
CTV’s Ken Shaw challenges the Prime Minister on the GM bailout.
By Steve Maich - Friday, December 12, 2008 at 10:16 AM - 38 Comments
BY STEVE MAICH
The Congressional plan to bail out the Detroit auto industry died a swift death last night, but the White House may yet swoop in with a unilateral bailout of its own. Reports surfaced this morning to suggest that the Treasury Department, on the authority of the President (and presumably the U.S. Fed) would tap the $700 billion fund to bail out Wall Street in order to get enough cash to Detroit to keep the companies afloat until next year.
That, of course, would finally destroy any notion that the U.S. Government is actually operating with a coherent plan. I know, I know…nobody really believed that anymore anyway. But the Trouble Asset Recovery Plan (TARP) was first supposed to buy up bad mortgage assets, then got converted into a giant bank account to buy bank stocks, and now, apparently, it might also branch out into the car business. This, dear friends, is what’s known as making it up as you go along.
Unlike my friend Andrew Coyne, I’m a little more sympathetic to the idea that governments can lend a helping hand to industry in times of trouble. That said, these bailout plans are disasters in the making. The best explanation of why can be found here (a column from a month ago in the Wall Street Journal by Michael Levine.) Continue…
By Colin Campbell - Friday, November 28, 2008 at 11:28 AM - 6 Comments
Rumours have been flying this week that GM is planning to drop some of…
Rumours have been flying this week that GM is planning to drop some of its eight different brands, including Pontiac, Hummer, Saab and Saturn. When the heads of the Detroit Three head back to Washington to beg for cash next week, they need to prove they’re willing to make steep cuts. For GM, this would be a necessary step in the right direction. Critics have been arguing for years that eight brands is way too many. Hummer is a write-off in this day and age. Saab is nice, but the upscale European brand doesn’t seem an easy fit in the GM family. And Saturn has always been a bit of a disappointing outcast. Pontiac, however, stands out on the list. The 82-year-old brand has struggled with poor sales in recent years, but seems on the verge of a big turnaround. The influential auto blog Jalopnik called the Pontiac G8 the ‘new BMW’. It would be a shame to see it go now.
By selley - Monday, November 24, 2008 at 1:32 PM - 10 Comments
Must-reads: Conrad Black on a certain grotesque miscarriage of justice; Jeffrey Simpson on Henry Waxman; Don Macpherson on Mario Dumont; Greg Weston on Bob Rae; George Jonas on “Singapore of the North.”
Brother, can you spare a dime?
From Washington to Lima to the Circuit Gilles-Villeneuve, there’s bad news on the economy. But you already knew that.
The National Post‘s Terence Corcoran asks us if we really want the future of the North American auto industry to be in the hands of politicians intent on aping Jerry Maguire (“Until they show us the plan,” said Sen. Harry Reid, “we cannot show them the money”) or who actually believe “GM would be better off if CEO Rick Wagoner wandered about U.S. airports in search of his luggage.” By all accounts, he observes, a bailout would mean “further suppression of market forces from an industry already burdened by regulations that have driven it into the ground” and the “continued existence of union protections,” among other impediments to future success. Let them go bankrupt, Corcoran implores, in hopes they might someday be able to recover “in a genuine market.”
Playtime’s over, the Ottawa Citizen‘s Randall Denley advises Canadian union members in both the private and public sectors. It may well be unfair that government workers should suffer for the fiscal mismanagement of city councillors or school board trustees, he concedes, but “the same accusation could be made about the management of many corporations that are laying off employees. That doesn’t create any more money for raises.” He suggests the brothers and sisters be happy just to remain employed, and believes “sharing the pain” with their fellow Canadians isn’t too much to ask.
By selley - Friday, November 21, 2008 at 5:23 PM - 5 Comments
A close look at what used to be known as the Big Three
As a rule, recent years have not been kind to automakers. But amidst the general chaos, the North American car manufacturers—formerly the “Big Three,” now more accurately known as the “Detroit Three”—have sunk well below the rest. As the CEOs of Ford, General Motors and Chrysler plead for mercy from Washington, Macleans.ca presents a statistical snapshot of their nightmare.
Highest stock price of the five largest publicly traded automakers as of the Nov. 20 close on the New York Stock Exchange: $59.79 (Toyota)
Toyota’s stock price on Nov. 20, 2007: $110.07
Best performance of those five stocks over the past year: -43.9% (Honda)
Poorest performance: -89% (GM) Continue…