Audi Takes On BMW …and Gets Slammed!
Great example of “billboard wars” in Southern California.
The billboard on the left was paid for by Audi …taunting BMW with their latest production model.
The tag line reads, “Your move BMW.”
(Note that BMW reads more prominently than their own Audi logo.)
The billboard on the right is BMS’s response …”Checkmate.”
Personally, I would have included an exclamation mark but maybe that’s insinuated by the mongo-large size of the billboard.
I can’t help wonder if the ad company who did Audi’s sign is still on contract..?
Chrysler Bondholders Play Chicken with Obama
Original story by Robert Farago
Chrysler bondholders have officially rejected the Presidential Task Force on Automobiles’ (PTFOA) “offer” to exchange 85 percent of their secured debt ($6.9B) for a stake in a reconstituted ChyrCo.
The Wall Street Journal reports that Chrysler’s April 30 Treasury deadline to seal an alliance with Italy’s Fiat SpA also requires concessions from lenders, as well as from the United Auto Workers union.
Chrysler owes lenders (including Citigroup Inc. and J.P. Morgan Chase & Co.) about $6.9 billion, but President Obama’s auto team had requested that the banks cut that to $1 billion, while gaining no equity stake in a restructured Chrysler.
In return, the bondholders’ counter-offered that the lenders cut Chrysler’s first-lien debt by $2.4 billion in exchange for a 40 percent equity stake and a Chrysler board seat.
Oh, and they want Fiat to put up a billion dollars. (Never mind that Fiat doesn’t have it.)
Remember: this is secured debt. If/when Chrysler is sold off in pieces, the bondholders would recoup about 65 cents on a dollar. (Or so they think.)
Lenders also question the logic of having Chrysler pair up with Fiat. The Italian company, they said, would bring “negative synergies for the first 3 years” and would enter the alliance with “limited downside for a deal of this size.” Moreover, they said it could result in a “wealth transfer from the U.S. taxpayer to a foreign company of potentially $10 billion or more.”
Two Cents…
Chrysler’s UAW employees have until 4/27 to accept their buyouts.
Does the federal government have the guts to stop writing checks to Chrysler, thereby being directly responsible for putting all those UAW members on the street?
Will the government end up lending FIAT the $1 Billion to secure the Chrysler partnership?
Chrysler doesn’t “own” much on paper so, what kind of tangibles do the banks have access to anyway?
With AIG underwriting the default insurance, did it occur to the banks to seek their own insurance in the event of default/C7? Seems that the government end up flipping the bill either way.
Chrysler’s Ongoing Saga Of Greed
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- Image via CrunchBase
Original story by Nick Bunkley and Edmund L. Andrews, NYTimes
Chrysler’s lending arm will not get an additional $750 million loan from the federal government after some executives declined to go along with its restrictions on pay, a person with direct knowledge of the matter said Monday.
This person, who spoke on condition of anonymity because talks on the matter are private, said the Treasury Department withdrew its offer to further aid Chrysler Financial because some of its 25 top executives would not agree to compensation waivers.
Chrysler Financial, which already has received $1.5 billion in aid, denied that executive compensation was related to a decision last week to seek additional funding from private lenders rather than the Treasury.
The Washington Post first reported on its Web site Monday that Chrysler Financial executives rejected compensation limits that would have been tied to a new loan.
The funding for Chrysler Financial is not part of the $4 billion that Chrysler has received from the government since December. The Treasury is expected to announce more aid for Chrysler and General Motors on Tuesday.
G.M.’s chief executive, Fritz Henderson, said last week that the company would soon need $4.6 billion, on top of the $13.4 billion it has borrowed already, to help it survive the second quarter.
The Obama administration’s auto industry task force gave Chrysler until the end of this month to form an alliance with the Italian automaker Fiat or risk having to liquidate itself under bankruptcy protection.
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Gas Consumption Musings
Image by macbiff via Flickr
Original article written by Alan Sidorov
One of the hardest parts of accepting the need to reduce [gas] consumption is to believe that each individual can make a difference.
How can your fuel-saving driving habits possibly offset the increase in consumption that is expected from China, India and many Third World countries? Well, it can’t, unless enough people worldwide get with the program.
Still, we have to start somewhere. For example, keeping your vehicle well tuned, tires properly inflated, driving more efficiently, and cutting down on unnecessary trips can have a nice effect, which will be immediately noticed in the bank balance.
Some gestures are largely symbolic, though they may carry some weight beyond that. The current Formula 1 regulations are a good example of this. The following comes from the official F1 website:
“Kinetic Energy Recovery Systems, or KERS, are legal from 2009 onwards. KERS recover waste kinetic energy from the car during braking, store that energy and then make it available to propel the car. The driver has access to the additional power for limited periods per lap, via a ‘boost button’ on the steering wheel.”
That sparse description introduces some interesting developments, as well as some difficulties which will challenge some of the best designers and engineers in the world.
At the moment, a variety of choices are being tried by various teams. Seven of the cars at Melbourne for the season opener were fitted with the systems, and Lewis Hamilton finished third in a vehicle equipped with KERS.
On faster tracks the boost buttons might be a bigger advantage. Advanced technology of this sort will be trickling down to roadgoing vehicles in short order. Whether the storage mechanism is compressed air, batteries, a flywheel or something else, the principle is sound.
We’re only beginning to explore the possibilities.
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The New Chrysler-Fiat Group
Original article posted in MotorTrend.com
To prevent liquidation, Chrysler is anticipating a pending alliance with Fiat, which would relinquish ownership by 35 percent (with no money down), propelling the alliance to the sixth-largest automaker in the world, just behind Ford Motor Company.
Chrysler “revealed” that three models would be added to its scrapheap - the Dodge Durango and Chryslers Aspen and PT Cruiser.
The Fiat 500 likely will be added to the line-up as a showroom traffic-builder for Chrysler/Dodge/Jeep dealers. Additionally, Fiat and Alfa Romeo are planned for Chrysler’s North American plants.
Chrysler also plans to:
- Cut 13 shifts, total (up one from December 2)
- Cut 3000 additional jobs
- Seek an additional $2 billion in loan guarantees, totaling $9 billion
Like it or not, the Cadillac CTS coupe, 2011 Jeep Grand Cherokee, and Chrysler 300 have made their way into the reorganization plan of the U.S. Treasury.
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