31st July 2008

Ford piles on the red ink

If ‘firms in the motor industry are good at losing money, but not good at going bankrupt’ as an equities analyst has just said, then maybe Ford can go to the top of the class after it’s latest results. Whatever the reasons for the ‘special items’, the bottom line does look a little gruesome. As pessimism mounts over general market prospects for North America in 2009, a restructuring Ford and GM are acutely aware of the need to be credibly seen to have sufficient liquidity to ride out the hard times ahead and keep the Chapter 11 chatter down. Fine, and maybe Ford is keen to get the bad news behind it with some of these write downs. 

But what if 2010 shapes up as a stinker, too? What’s next to be cut and at what point are the cost cuts either building a scary looking deferred backlog of spending that will have to hit sometime or starting to impact the patient’s vital organs and long-term health rather than simply peripherals/redundant parts and the need for less internal working capital on lower production?  

US: Special charges plunge Ford $8.7bn into red in Q2

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31st July 2008

Reform Talk In Cuba Touches On Economic Efficiency

Latin Business Chronicle

Is Raul Castro preparing the ground for more substantive, pro-market economic reforms in Cuba?

Inter-American Dialogue

Cuban President Raul Castro said [recently] that “socialism means social justice and equality, but equality of rights, of opportunities, not of income” and that “equality is not egalitarianism.” What is the significance of Castro’s comments? Is he preparing the ground for more substantive, pro-market economic reforms? What possible reforms do you see in the offing?

Dennis Hays, Vice President of Thorium Power and a former Coordinator for Cuban Affairs at the US Department of State: Raul will never be the public speaker his brother was, but that doesn’t mean he has nothing to say. In an address full of anecdotes and faint attempts at humor, he managed to get across a number of interesting points, including an ad-libbed admission that ‘sometimes in socialism two plus two equals three.’ But after noting a number of ways in which the Cuban economy continues to be the most dysfunctional one this side of Zimbabwe, he finally got to the point—Cubans can expect to be taxed in the future for many of the things they take for granted now, and major discrepancies in income will become commonplace (starting, of course, to the advantage of the senior military).

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    31st July 2008

    Car Disgust–1978 Chevrolet Monza Wagon

    At the end of the 1977 model year, GM discontinued the Chevrolet Vega. For 1978, the General would depend on the Vega-derived Monza to occupy the “compact” spot in the Chevy lineup. Needing a station wagon version to have a complete line, GM fitted leftover Vega wagon bodies with the “Monza S” front clip to produce the Monza Wagon.

    I had one, and it was the worst car anyone in my family ever owned.

    My father acquired it in 1980 from someone who worked at
    the Lordstown Assembly plant where it was built. The day Dad brought it home, we found an ice scraper in the glove
    box, an artifact of the previous owner. It was red, with a GM Assembly Division logo, and had a mysterious
    inscription: “GM LORDSTOWN MANAGEMENT TEAM – LET’S GET 150!”

    It looked harmless enough. As late-1970s domestic cars go, the Monza Wagon
    was actually rather attractive.

    Ours was a pleasant shade of dark brown with a beige interior, a
    combination that came off better than it sounds. There was chrome
    around the windows, but not too much. It had managed to escape the
    factory without being subjected to the indignity of optional vinyl
    woodgrain side trim.

    The front buckets were pretty good for OEM seats. The rear seat was
    small, but livable. The cargo area was big relative to the car’s
    overall size. If you folded the rear seat down it was positively
    enormous–and anything that still didn’t fit in there could be lashed
    to the handy roof rack.

    To point out these virtues is not to damn the Monza Wagon with faint
    praise. That would be letting it off easy. The Monza Wagon deserves
    nothing less than full-throated condemnation–or perhaps excommunication would be more appropriate. The car was a gasoline-powered mortal sin.

    Let’s start with build quality. Well, actually, it would have been nice if someone at GM had
    started with build quality. Rather early on, I noticed that every time
    the car hit a pothole or rough patch of pavement the dashboard rattled
    and shuddered like it was falling off. This was Northeast Ohio, circa 1980-81, and rough pavement was the only kind we had. This made for a lot of rattles.

    The panel covering the Monza’s wide-screen horizontal speedometer was
    held on with either six or  eight small screws, I forget
    the exact number. To be more precise, it was supposed
    to be held on with six or eight screws. This one was held on with two;
    the holes for the others still had some plastic “flash” which gave mute
    testimony that the screws had never been installed.

    A trip to the hardware store and quick work with a screwdriver solved
    the immediate problem. Over the course of my relationship with this
    car, it developed many other squeaks and rattles and odd noises in the
    interior as things worked loose. In every instance, the problem could
    be traced to fasteners that had never been fastened.

    I knew dozens of people who worked at GM’s Lordstown assembly plant.
    They were friends of my father, neighbors, the parents and older
    siblings of my schoolmates, some of the non-college-track kids from my
    high school. They were good and decent people. It distressed me to see
    just how poorly they’d done their jobs, at least on the interior of
    this one little station wagon. Would it have killed you to put all the screws in?

    The Monza’s problems went beyond a few dozen missing screws. There
    were two major weak spots in the powertrain design, the engine and the

    The engine was a 3.2-liter pushrod V-6, an optional upgrade from the
    base model four-cylinder 2.5-liter Iron Duke. History records that the
    V-6 produced 90 horsepower. The Iron Duke produced 85 horsepower. That
    is to say, increasing the engine displacement by 28%, and adding the
    complexity of two more cylinders, resulted in a whopping 5-horsepower gain. The
    V-6 did, however, use a lot more gas!

    The V-6 produced more torque than the Iron Duke, 165 foot-pounds versus
    123. You might reckon that the increase in torque would make some
    difference in performance. Ah, but you would have reckoned without the
    transmission, one of GM’s ubiquitous 3-speed Turbo-Hydramatics.
    Whatever additional twist the V-6 may have generated compared to an
    Iron Duke was soaked up by the slushbox and never got to the rear

    As a result, on level ground, with the horsepower-sapping air
    conditioner shut off, using brake-torque launch technique (in which you
    hold the brakes on while revving the engine to get the torque converter
    spun up), the Monza Wagon could be made to do a frenzied 0-60 dash in … wait … here it comes … almost there … about 14 or 15 seconds.

    Yes, my friends, the six-cylinder Monza Wagon combined the raw
    pavement-burning muscle of the four-cylinder Iron Duke with the frugal fuel economy of
    a small-block V-8! There were VW Super Beetles that could’ve smoked it.

    It may have been slow off the line, but at least the handling was … almost adequate. Being young and foolish and a sports-car wannabee,
    I tossed it down twisty back roads at speeds that would have deeply
    concerned both my Dad’s insurance agent and the local constabulary, had
    either of them caught me doing it. The Monza’s road-holding was probably
    competitive with other 1978-vintage compacts, but it was a bit
    tail-happy, and the power steering insured that none of that
    annoying “road feel” made it to the cockpit. Like most any rear-wheel-drive Detroit car made in that decade, it was extremely skittish in snow.

    Had it merely been an underpowered compact with indifferent build
    quality and middling driving dynamics, it wouldn’t have been such a bad
    little car. Where the Monza Wagon truly failed was in the area of
    durability. Not to put too fine a point on it, it had none.

    In the two years in which I was the primary driver of this vehicle,
    it suffered a series of breakdowns that would have made a Fiat or
    Triumph hang its head in shame. I got to know my father’s favorite
    mechanic, a man named Lenny, quite well. There is not space enough to
    list all the troubles this car gave me, so I’ll confine myself to the
    more “exciting” incidents:

    • The V-6′s oil pump suffered a sudden “epic fail” mere days
      after its last oil change. One minute, all was normal. In the space of
      three or four seconds, there came a series of unpleasant thumps from
      the engine bay, followed by a very loud bang as the engine threw a rod.
      At that point, the “OIL PRESSURE” light came on, in case I hadn’t
      gotten the hint. Lenny found a replacement 3.2 V-6 in a salvage yard,
      dashing my hopes of an engine upgrade.
    • The replacement engine’s water pump had a pinhole leak in the main
      casting. Not enough coolant ever escaped at any one time to leave a puddle, but over a period of a few days, the losses added up. You’d be
      zinging along the highway without a care in the world and suddenly the
      car was overheating and the radiator and surge tank were bone dry. Let it
      cool down, re-fill the radiator, toss in some Stop-Leak, wait a few
      days, repeat. Lenny replaced hoses and gaskets and such several times
      before he was finally able to isolate the problem.
    • While the cooling system had problems with dehydration, the unibody
      suffered from fluid retention. One Sunday I discovered that the left-rear quarter panel was half full of rainwater that had leaked in around
      the window seals. Some clever person in GM’s engineering department had
      designed drain holes into the bottom of the body panels to let wayward
      rainwater out. Unfortunately, some other clever person in GM’s
      engineering department had specified that the inside of the quarter
      panel be stuffed with a horsehair insulation that deteriorated in
      water. The soggy insulation had sagged down and plugged the drain
      holes. It took a half-hour’s thrashing with a screwdriver and other
      long pointy implements to clear the clog.
    • The last straw came in the spring of 1983. I noticed a nasty
      grinding sound when the car was started. By now I was fully sensitized
      to the Monza’s self-destructive tendencies, so I went directly to
      Lenny’s garage. “Sounds like the flywheel,” Lenny opined. He put it up
      on the rack and set his crew to pulling the transmission. They loosened
      the bolts on the flywheel, and the flywheel came apart in their hands.
      It had cracked into three pieces from metal fatigue, and the bolts were
      all that were holding it together.

    At this point, we had lost all confidence in the car. It wasn’t
    rusting yet, but that was only a matter of time. I was about to move
    out of town to start a new job, and the last thing I needed was a car
    that was always a heartbeat away from a call to Triple-A.

    We put an ad in the paper. Someone showed up and offered me
    something less than the asking price. I took it, grateful to be rid of
    the beast. Lenny was the only one sorry to see it go–the repair work
    he’d done on that car had provided his kids with three years of private
    school tuition and new bicycles at Christmas.

    The saddest thing about the Monza Wagon was its wasted potential.
    The basic design wasn’t bad. Had it been screwed together properly, had
    it had a better engine and a five-speed, had someone drained the
    Novocain out of the steering gear, had it been able to go for more than
    a week without a breakdown, it could’ve been one hot little sleeper.

    When I cleaned it out before turning over the key to the buyer, I
    left the red ice scraper in the glove box, the one that urged Lordstown
    managers to “GET 150!” It had come with the car; it seemed only proper
    that it should go with the car. I never found out what metric “150″ was
    the target for, but unless it was something like “missing screws per
    vehicle,” I suspect they didn’t achieve it.

    The top and bottom photos are from the GM H-Body Registry, which is maintained by the Monza Homestead. The brown ’79 wagon is owned by David Trott, and the bottom wagon with the slick wheels is owned by Bill McClaskey. The catalog illustrations came from the website of the H-Body Organization,
    another group of owners and fans of the Vega, Monza, and their
    badge-engineered siblings. They seem like nice people in spite of their
    irrational affection for Vegas and Monzas, and they’ve compiled a lot
    of good historical and technical information. H-body Organization
    member “Monzawagon1320” is restoring a beige ’78 Monza Wagon, and the photo comes from his project journal. I can’t understand why anyone would want
    to restore a ’78 Monza Wagon, but he’s doing a good job and seems to be
    enjoying himself, so who am I to judge? Best of luck to him.

    –Cookie the Dog’s Owner

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    31st July 2008

    Nissan Offers Voluntary Buyouts in Tennessee

    SMYRNA, Tennessee — For the second time in a year, Nissan Motor Company is offering voluntary buyout packages to its U.S. workers. To counter a dramatic decline in sales of trucks and SUVs, the Japanese automaker said Wednesday it would provide lump-sum payments of up to $125,000 to workers at its Smyrna assembly and Decherd powertrain plants in Tennessee.

    Nissan employs 6,600 hourly and salaried workers at the two Tennessee plants and is hoping to reduce its workforce by about 18 percent, or roughly 1,200 employees.

    Depending on their tenure, workers are being offered payments of $100,000 or $125,000, plus medical and vehicle-purchase benefits. They can elect to take a buyout in 2008, 2009 or 2010, but benefits diminish each year.

    Nissan also said it would eliminate night-shift truck production at the Smyrna plant, beginning August 11. The factory builds the Frontier pickup, Xterra and Pathfinder SUVs, Maxima sedan and Altima sedan and coupe.

    The company previously announced it would eliminate one shift of truck production in Canton, Mississippi, while adding a third shift of Altima sedan production.

    What this means to you: Nissan was the first Japanese automaker to build a competitive full-size pickup — a gamble that now appears may never pay off. — Paul Lienert, Correspondent

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    30th July 2008

    2009 Porsche 911 Targa 4S

    Base Price: 2009 Porsche 911 Targa 4S – $100,100

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    30th July 2008

    Honda Interactive Crash Test Demo Invites Viewers to “See What We See”

    Press Releases

    PrintFriendly Format

    Honda Interactive Crash Test Demo Invites Viewers to “See What We See”

    American Honda Motor Co., Inc. has launched a unique online video experience of a vehicle crash test that invites viewers to witness the crash impact and explore it from different camera angles and at various motion speeds.

    The crash test demo is part of Honda’s “Power of Dreams” corporate ad campaign (http://www.dreams.honda.com) which invites consumers to view the world from inside Honda’s vantage point. By encouraging the viewer to “see what we see,” Honda hopes to foster an understanding of what motivates the mobility company – in this case, the company’s long-standing commitment to safety.

    “The crash test video provides our customers with an inside look at how Honda engineers think about and develop advanced safety technologies, such as ACE body structure and advanced air bag technology,” said Barbara Ponce, manager of corporate advertising. “We think it’s best to let customers see for themselves.”

    The video, which was provided to Honda by the National Highway Traffic Safety Administration (NHTSA) and depicts the New Car Assessment Program (NCAP) frontal rating test, shows a white 2008 Honda Accord sedan traveling at 35 mph crashing into a fixed barrier, methodically crumpling the frontal structure in a few milliseconds. The variable speed video and 3 camera angles are accompanied by interpretive copy that explains to viewers what is occurring at different stages of the crash test.

    The NHTSA frontal NCAP test resulted in a 5-star driver, 5-star front passenger rating for the 2008 Honda Accord sedan. These are the highest frontal NCAP ratings possible and indicate a 10% or less chance of serious injury in a head-on, 35 mph collision with a vehicle of similar size and weight.

    Government star ratings are part of NHTSA’s New Car Assessment Program (www.safercar.gov).

    In 2003, Honda launched its “Safety for Everyone” initiative in North America, a comprehensive approach to vehicle safety that seeks to provide enhanced levels of occupant protection and to help with crash avoidance in all Honda passenger vehicles, while also making an active commitment to mitigate injuries for the occupants of other vehicles and pedestrians. Honda operates two state-of-the-art indoor crash test facilities in Tochigi, Japan, and Raymond, Ohio.

    About Honda
    Honda began operations in the U.S. in 1959 with the establishment of American Honda Motor Co., Inc., Honda’s first overseas subsidiary. Honda began U.S. production in Ohio in 1979, and began U.S. automobile production in 1982 at its Marysville, Ohio, auto plant. The company has invested more than $10.6 billion in its North America operations, including 14 major manufacturing facilities employing more than 35,000 associates and producing more than 4 million products annually, including more than 1.4 million Honda and Acura automobiles as well as motorcycles, all-terrain vehicles, personal watercraft, lawn mowers, general-purpose engines and other power equipment products. Honda currently partners with more than 600 North American suppliers and on a global basis purchased more than $18.8 billion in parts and materials from North American suppliers last year.

    Honda Multimedia Newsroom: http://www.hondanews.com

    ©2008 American Honda Motor Co., Inc. All information contained herein applies to U.S. vehicles only.
    Please see our Privacy Policy and Legal Terms and Conditions. Visit Honda.com. View Contact Us.

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