USMotor Industry struggling to keep their head above water?

[peter]

General Motors (GM) and eBay are launching a trial scheme in the US that will allow customers to buy new GM cars via the auction website.
More than 225 of GM's 250 Californian dealers have signed up to the scheme, which will allow consumers to either pay a fixed price or try to haggle.

http://news.bbc.co.uk/2/hi/business/8193920.stm

Peter

[peter]

The format of the former Big 3 will be known by the end of the year.

The final story will take a little longer !


Peter

[peter]

An interesting article about GM marketing strategy : GM: Still Making the Same Mistakes

Desperate people do desperate things ?



Peter

[peter]

Time for a reality check ?

Saab has always had an extraordinarily enthusiastic and devoted worldwide customer base. They, like many others, believe that the production of competitive premium cars is the way forward. Koenigsegg were seen as the future salvation of Saab in Sweden.

Industry insiders see this differently :

• Current production rates are around 35,000 (retail sales are less) per year. It is generally held that annual figures closer to 500,000 are needed to generate enough income to replace platforms over their life time.
• Saab has been emasculated during the 20 years of GM rule. Design, engineering, parts warehousing, finance, wholesale distribution, retail distribution and purchasing are now heavily entwined within the GM business. This was a sensible cost saving strategy at the time, but is now a threat to the survival of the Saab business. And remember that all Saab engines will be sourced through GM / Opel companies.
• Saab now have (or will have) two models to serve them for the next 7, or so, years. They won’t be gifts – almost certainly they will be the subject of royalties to GM.
• The Koenigsegg sports car operation provides only a small minority of the investment. It is mostly financed by other financial players, bank borrowings and government loans. From this point of view it is a venture capital operation, and the players probably intend recovering their investment sooner rather than later. The most likely scenario is that they develop the business and sell it by 2015. It would make a fine addition to one of the Chinese car manufacturing operations wishing to penetrate the premium market ?
• Koenigsegg have been very vague on future plans. “Exciting future brand development“ means what ? It may be that they intend to sell the Saab name and production lines whilst keeping (or selling ?) the Trollhattan factory. There have been rumours of using it to assemble electric cars.
• In fact, Koenigsegg bring very little to the party, and arguably their presence is a threat to the future of Saab. They are unable to provide parts, retail or wholesale car distribution chains, and there is no obvious route forward with joint platform development. Saab really needed an existing manufacturer who could provide the parts of the business lost in the GM years.
• GM are happy to get rid of Saab. Saab employees see Koenigsegg as the best option if they will be able to control the company in the future.
• There have been a few articles in the financial press questioning the future of Saab with Koenigsegg. There were criticisms of the transparency of the Koenigsegg group. Then Mark Bishop pulled out (a major financial player concerned about publicity ?). Now, it seems that Koenigsegg may not have enough funds to invest either : www.wsws.org/articles/2009/aug2009/saab-a27.shtml
& http://online.wsj.com/article/BT-CO-20090826-707159.html ,
www.ft.com/cms/s/a9abb1b6-9045-11de-bc5 ... abdc0.html .
• Swedish Prime Minister Frederick Reinfeldt has stated, “There are those trying to change the way companies should be run in Sweden. Firstly, the buyer stumps up insufficient funds. Then the venture capital and credit markets ... decline to join in. And then the state is left there as the largest venture capitalist of them all, who with welfare money should go in and assume the risk that no one else wants to take.”


As GM are now reconsidering the Opel position, could Saab be the premium product offering ? Opel and Saab are already entwined, but Opel are believed to be against future tie ups with Saab.

It is hard to see where Saab will be in 2019 ?

[peter]

G.M. to Drop G.M. Logo From Its Vehicles

G.M. is removing the “G.M. Mark of Excellence” logos from all its Chevrolet, Buick, Cadillac and GMC models. The logo had been a fixture on all G.M. vehicles since 2005.

The reason, officially, is that the recently organized company, which is shedding its Pontiac, Hummer, Saturn and Saab brands, wants to emphasize its remaining marques. “We really want to elevate the prominence of our four core brands,” Terry Rhadigan, a G.M. spokesman, told news outlets Tuesday. “It’s really going to be an intense focus.”

More : http://wheels.blogs.nytimes.com/2009/08/27/gm-to-drop-gm-logo-from-its-vehicles/

Some cynics say the real reason is that research has shown that the public perception of GM products is that they are crap.

[peter]

Both Chrysler and GM went into administration, then the possible survival elements very quickly became "new" companies leaving the US taxpayer with the rest.

So, Chrysler has got into bed with Fiat. Benefits are retail distribution in US for Fiat products; small cars and diesel engines for Chrysler; better european distribution for Chrysler; joint design and purchasing savings ; volumes should be around 6m.

GM has ditched all except for Chevrolet, Cadillac, Buick and GMC. Hummer, Saab, Opel/Vauxhall and Saturn are in the process of sale. Pontiac & Oldsmobile have been closed. The position of Holden is unclear.

Ford has been more succesful and so far has not required US govt funds. However, they disposed of AC, Aston-Martin, Land Rover and Jaguar early in the game and currently are negotiating the sale of Volvo.

So, the substantially smaller "big 3" survived, but the sale process has opened the door to Chinese and Indian automakers. They will now use this "foot in the door" to the US and EU markets as a springboard to launch aggressive sales plans.

Of course, most damage will be to the US manufacturers.

[peter]

DETROIT — General Motors Co. said Wednesday it would shut down its Saturn brand after an agreement with Penske Automotive Group Inc. to acquire it fell apart.

Saturn was a GM experiment in the 1980's to throw away the past and adopt best practise in design, marketing and distribution. The objective was to show the Japanese importers how to do it properly.

After the initial launch GM were cash strapped and new management compromised the initial concept until it became a rebadged Opel operation. Sales never achieved the critical number to be profitable.

In the GM meltdown, Penske wanted to acquire the Saturn distribution network (which was acknowledged as one of the best) and use it to market a new brand in US after the existing Saturn product became obsolete. Industry insiders could see a future for Penske as importer for an Indian or Chinese manufacturer.

After signing an initial agreement, Penske have not been able to finalise a supply agreement, so have withdrawn from the acquisition.

Probably the end of the Saturn experiment, though many of the best concepts live on with other brands.

More :
http://news.bbc.co.uk/2/hi/business/8284189.stm

[peter]

In a last minute change of direction, GM decided not to sell Opel/Vauxhall to Magna.

Opel have been busy redesigning their product offering over the last 10 years with the aim of making them appeal to younger owners rather than making them as cheap as possible. The challenge is to increase the proportion of sales to more profitable private buyers and reduce the reliance on fleet deals.

The German government, having engineered various support deals for Magna, have no confidence in GM management and are very unhappy about the turnaround :

In a statement, Roland Koch, a confidant of German chancellor Angela Merkel, said that considering the "negative experience in recent years with GM's corporate policy, I'm worried a lot about the future of (Opel) and its staff."

More :

http://online.wsj.com/article/BT-CO-200 ... 21236.html
http://www.thefirstpost.co.uk/55582

Will the US government require repayment of the funds injected to secure an Opel free GM future ?

[peter]

US motor cycles ................

In parallel with the woes of the big 3, the US motor cycle business has been having exciting times.

The US products evolved as heavy, with poor quality and poor performance.


Harley Davidson suffered from the arrival of lighter and better performing UK marques (pic Triumph Bonneville). If not reliable, they were no less so than the Harleys !


Both European and US motor cycle sales then collapsed under the onslaught of Japanese products. The Japanese had conquered the moped and small commuter bike market across the world, and in the 1960's launched larger motorcycles. These were very high performing, reliable and cheap. The Japanese could coax almost as much performance from a lightweight 250cc machine as the European 500cc machines provided. At the end of the decade, the Honda CB750 was launched (pictured below). With 4 cylinders, electric start, indicators and reliable high performance, it rapidly dominated the big bike market worldwide.


The UK motor cycle industry spluttered and eventually virtually died. It had suffered rationalisation and mergers during the late 50's and 60's as increased affluence drove the mc market towards 4 wheels. Many of the designs were evolutions of pre war machines. This Velocette was offered for sale until 1971.


Harley Davidson relaunched themselves as a traditional US lifestyle product in the cowboy mould. An attempted move into small 2 stroke machines following the acquisition of Aermacchi of Italy was abandoned in the 1970's.


A new company - Buell (founded by ex H-D engineer Eric Buell) - designed and launched attractive, sporting motor cycles to fill the gap in the US motorcycle market.


They began using exclusively Harley Davidson engines and in 2003 became part of Harley Davidson. They ceased production in October after selling over 100,000 very expensive motorcycles, unable to survive in the recession hit US market : www.youtube.com/watch?v=t5i7JDNACtI

In 2008 H-D had acquired the even more expensive and sporting Italian MV Augusta company, which was offered for sale in October 2009.


Harley Davidson is under pressure, partly because the high priced product relies on financed sales in US, which have tumbled : http://online.wsj.com/article/SB20001424052748704107204574474972942241560.html

This 2010 Harley Davidson CVO Street Glide is priced at over USD30,000 with accessories.


Watch this space as big thirsty US motorcycles tackle the same problems as big thirsty US cars.

[gurubarry]

I wont shed a tear if HD go ...... all the facts you give are correct Peter . I have a 750 Suzuki intruder 1991 and it is a dream . I am looking at the new Triumphs , but the local dealer dismissed me out of hand when I toured his showroom at Pascal Motos ,Garosud in Montpellier . In these troubled times you would think gealers would be falling over themselves to help a prospective buyer part with £3000 plus , no wonder there is a motoring industry crisis .

[peter]

Time for a reality check ?

Saab has always had an extraordinarily enthusiastic and devoted worldwide customer base. They, like many others, believe that the production of competitive premium cars is the way forward. Koenigsegg were seen as the future salvation of Saab in Sweden.

Industry insiders see this differently :

• Current production rates are around 35,000 (retail sales are less) per year. It is generally held that annual figures closer to 500,000 are needed to generate enough income to replace platforms over their life time.
• Saab has been emasculated during the 20 years of GM rule. Design, engineering, parts warehousing, finance, wholesale distribution, retail distribution and purchasing are now heavily entwined within the GM business. This was a sensible cost saving strategy at the time, but is now a threat to the survival of the Saab business. And remember that all Saab engines will be sourced through GM / Opel companies.
• Saab now have (or will have) two models to serve them for the next 7, or so, years. They won’t be gifts – almost certainly they will be the subject of royalties to GM.
• The Koenigsegg sports car operation provides only a small minority of the investment. It is mostly financed by other financial players, bank borrowings and government loans. From this point of view it is a venture capital operation, and the players probably intend recovering their investment sooner rather than later. The most likely scenario is that they develop the business and sell it by 2015. It would make a fine addition to one of the Chinese car manufacturing operations wishing to penetrate the premium market ?
• Koenigsegg have been very vague on future plans. “Exciting future brand development“ means what ? It may be that they intend to sell the Saab name and production lines whilst keeping (or selling ?) the Trollhattan factory. There have been rumours of using it to assemble electric cars.
• In fact, Koenigsegg bring very little to the party, and arguably their presence is a threat to the future of Saab. They are unable to provide parts, retail or wholesale car distribution chains, and there is no obvious route forward with joint platform development. Saab really needed an existing manufacturer who could provide the parts of the business lost in the GM years.
• GM are happy to get rid of Saab. Saab employees see Koenigsegg as the best option if they will be able to control the company in the future.
• There have been a few articles in the financial press questioning the future of Saab with Koenigsegg. There were criticisms of the transparency of the Koenigsegg group. Then Mark Bishop pulled out (a major financial player concerned about publicity ?). Now, it seems that Koenigsegg may not have enough funds to invest either : www.wsws.org/articles/2009/aug2009/saab-a27.shtml
& http://online.wsj.com/article/BT-CO-20090826-707159.html ,
www.ft.com/cms/s/a9abb1b6-9045-11de-bc5 ... abdc0.html .
• Swedish Prime Minister Frederick Reinfeldt has stated, “There are those trying to change the way companies should be run in Sweden. Firstly, the buyer stumps up insufficient funds. Then the venture capital and credit markets ... decline to join in. And then the state is left there as the largest venture capitalist of them all, who with welfare money should go in and assume the risk that no one else wants to take.”


As GM are now reconsidering the Opel position, could Saab be the premium product offering ? Opel and Saab are already entwined, but Opel are believed to be against future tie ups with Saab.

It is hard to see where Saab will be in 2019 ?

DETROIT, Nov. 24 (UPI) -- General Motors Co. said Tuesday a Swedish buyer lined up to purchase Saab Automobiles had backed out of the deal.

It was, perhaps, a long shot. The New York Times said the buyer, Koenigsegg Automotive, is a niche sports car company that has 45 employees and is unlisted.

More ... www.upi.com/Business_News/2009/11/24/GM ... 259083575/

Sad for Saab employees and the few remaining enthusiasts, but always predictable.

Peter

[shel]

US motor cycles ................

Harley Davidson relaunched themselves as a traditional US lifestyle product in the cowboy mould. An attempted move into small 2 stroke machines following the acquisition of Aermacchi of Italy was abandoned in the 1970's.

Kinda-sorta. The Harley Hummer 2-stroke was virtually a clone of the BSA Bantam. I can't remember where they were built, but I don't think Aermacchi was involved. Aermacchi built 250cc and 350cc 4-stroke singles for Harley, but they weren't all that popular.

Really, once Honda et al decided to conquer the US market, everyone else was delegated to being, at best, a niche player.

Back then, I was a mechanic in the largest motorcycle shop in a US city of over a million people. We sold Honda, Ducati, BMW, BSA, Norton, and Matchless; we sold at least 10 Hondas for every bike of any other brand. In the year I worked there, we sold no Ducatis, no Nortons, one Matchless, two BMWs, and a half-dozen BSAs. We sold about 6 Hondas a week.

On the subject of SAAB ... once they lost their individuality, they lost their selling point. I liked the old ones, say up through the 900/9000 years, and I really dug my old roommate's 750 GT, but the new, jumped-up-Opel SAABs leave me cold.

-Shel

[peter]

23:59:59 for SAAB ?

General Motors Co. said it will phase out its Swedish Saab brand if no deal is reached by the end of this month.

More ...

Sad, but predictable

Peter

[peter]

Kinda-sorta. The Harley Hummer 2-stroke was virtually a clone of the BSA Bantam. I can't remember where they were built, but I don't think Aermacchi was involved.

This is the one I remember working on in the 60's :




Are you thinking of an earlier generation (40's and early 50's ?) which looked like this :






Peter

[shel]

Basically, yep and yep.

The Aermacchi horizontal single engine with the massive horizontally-finned cylinder is pretty unforgettable, though I don't have any particular memories of the cycle parts. I knew a woman who had one, back in the sixties, but I don't remember the cycle as well as I remember the rider. They just weren't all that popular in our area.

The Hummer ... I don't know if I ever actually saw one, though I saw pictures and heard second-hand tales. I did have a BSA Bantam for a short period of time, and it was very similar, although a mirror-image, with the shift on the right, etc.

By the time I got into motorcycles, in 1965, most of the smaller non-Japanese machines were pretty much gone. There were a lot of older, larger British bikes about, but in the sub-250cc class, you were hard-pressed to find anything but Japanese bikes then.

Back in the day, I had quite a number of non-Japanese bikes. I was fairly brand-agostic: Triumph (Tiger Cub, 500, Bonneville), BSA (B31, Lightning), Ducati Diana, even a Jawa. Later, though, it was pretty much Honda, Honda, Honda.

-Shel

[peter]

The old one looks like the original 125cc Bantam.

I had ......... BSA Bantam D7, Triumph Tiger Cub, Ducati 250 OHC, Norton 350, Triumph TR6R, Suzuki 250 (15 yrs later), then learned how to lose more money faster on old cars and boats.



Peter

[shel]

I had ......... BSA Bantam D7, Triumph Tiger Cub, Ducati 250 OHC, Norton 350, Triumph TR6R, Suzuki 250 (15 yrs later), then learned how to lose more money faster on old cars and boats.

Yeah, you can spend a lot of money on old cars, but at least they don't sink at their moorings like old boats do.

You needn't ask how I know.

-Shel

[james-g]

When I was working on the construction of the M2 motorway, I had a company Bantam which got clogged up with the chalk every day, so I had to call a van with a replacement to keep going.

I had a Tiger Cub also and a pre-war 650 shaft driven Sunbeam but my last bike was a BMW in the 80s.

You don't have to lose money on old cars.

I bought the one shown here:
http://www.astonmartins.com/prewar/bamf ... 6valve.htm
for £100 and sold it for £125 in 1958. The present owner has had the car since then and it must be worth rather more now, although he needed to spend a bit on it.

[peter]

I actually made money until the last boat.

I started with old cars and bikes as transport, then as a supposed investment pot when I had company cars.

I even "broke even" on my first boat. Then it was all downhill.

I haven't told Mrs Peter that I've added these to my favourites :

www.leboncoin.fr/li?q=&ca=13_s&th=1&c=3 ... z=ex:75001
www.kettering-classics.com
www.vintagebike.co.uk/Classifieds/categories/9.html
www.drclassic.co.uk
www.oldbikemart.co.uk/classifieds.php
www.andybuysbikes.com
www.motorcyclesclassic.com
www.cotswold-classics.co.uk
www.gbmotorcycles.com

www.autosalon-singen.de/Liste.aspx?&sel ... guageID=en

I have a friend who had storage space and a bit more money and never sold his old bikes.
He now has 20+ 50's & 60's big singles including a Norton International, BSA DBD34 Goldstar, Thruxton Velocette, etc. The early ones were bought for less than £20 (usually another for spares !).
His first mc was a 50's military spec 125cc Bantam which he bought new, still in its delivery crate, in 1967. Since passing his test he has always had big singles.
In the 1970's he kept the bikes in a warehouse on a sisused airfield. We used to race the bikes round the perimeter road - no helmets, tax or insurance of course !




Peter

[peter]

I've been thinking a bit more about the Koenigsegg explanation of their withdrawal from the Saab negotiations.

Many have assumed that the problem was GM delays and reduced Saab sales.

Given that expensive sports cars suffer heavily in times of recession, could it have been Keoenigsegg that ran out of time ? One scenario is that they needed the Saab deal which would have carried them through to better times (remembering also they were putting in very little cash themselves).

Interestingly Broughtons, who are both the Spyker and Koenigsegg exclusive dealers for UK have 1 used and 2 new Koenigsegg cars in stock and 1 used Spyker : http://www.broughtons.co.uk

Auto Salon Singen have two nearly new examples including this one : http://www.autosalon-singen.de/verkauf- ... Koenigsegg

A couple more here http://www.callisma.se including a 2010 model from stock.

In fact, a little research located 18 advertised for sale here : http://www.vast.com/cars/used-for-sale-Koenigsegg/ and another 10 are listed here : http://www.jameslist.com/brands/koenigsegg

And many more here : http://www.google.com/search?&q=new+koenigsegg+for+sale

There are quite a few 2008 & 2009 with very very low mileage.



Thought provoking, perhaps ?

[peter]

Interesting to look at the GM board of directors following the (did he jump or was he pushed ?) resignation of CEO Fritz Henderson after 25 years with the company.

GM board of Directors

Daniel F. Akerson
Managing Director and
Head of Global Buyout,
The Carlyle Group
Director since July 24, 2009

David Bonderman
Co-Founding Partner,
TPG
Director since July 24, 2009

Erroll B. Davis, Jr.
Chancellor,
University System of Georgia
Director since July 10, 2009

Stephen J. Girsky
President,
S. J. Girsky & Company
Director since July 10, 2009

E. Neville Isdell
Retired Chairman
and Chief Executive Officer,
The Coca-Cola Company
Director since July 10, 2009

Robert D. Krebs
Retired Chairman and
Chief Executive Officer,
Burlington Northern Santa Fe Corporation
Director since July 24, 2009

Kent Kresa
Chairman Emeritus,
Northrop Grumman Corporation
Director since July 10, 2009

Philip A. Laskawy
Retired Chairman
and Chief Executive Officer,
Ernst & Young LLP
Director since July 10, 2009

Kathryn V. Marinello
Chairman
and Chief Executive Officer,
Ceridian Corporation
Director since July 10, 2009

Patricia F. Russo
Former Chief Executive Officer,
Alcatel-Lucent
Director since July 24, 2009

Carol M. Stephenson
Dean,
Richard Ivey School of Business,
The University of Western Ontario
Director since July 24, 2009

Edward E. Whitacre, Jr.
Chairman Emeritus of AT&T Inc
Chairman and Chief Executive Officer,
General Motors Company
Director since July 10, 2009



A wealth of Motor Industry experience ?

[peter]

GM announced today that they had not managed to sell Saab and would wind down the company in Sweden.

Source : www.thestreet.com/story/10649310/1/saab ... reath.html

It now remains to be seen if the name will survive within GM or possibly China.

Peter

[peter]

Whilst Saab goes through last minute reviews by GM, Automotive Management magazine has today announced the agreement of terms for the sale of Volvo :

Ford has agreed the terms to sell its Volvo brand to Chinese car manufacturer Geely.

Ford said some work still remains to be completed but a "definitive sale agreement is anticipated in the first quarter".

Government approval of the deal still needs to come through before it can all be finalised and financing for the deal also needs to be completed. However, Ford said “substantive commercial terms” have been agreed.

Details of how much Geely will be paying for Volvo remain confidential but it is rumoured the Chinese manufacturer will be paying approximately £1.2 billion in comparison to the £4 billion Ford paid for the Swedish brand back in 1999.

Peter

[serge]

Volvo to the Chinese by the looks of it .................







............... will they be able to pronounce it?

[peter]

Lucky they didn't buy Rolls Royce, Range Rover or something difficult to pronounce ?

Peter