GM’s Financial Future Questioned

Opel factory

There is talk in the financial press that General Motors, which has been giving and getting lots of good news for over a year, is facing some difficult times. Bloomberg:

Through three quarters, Detroit-based GM made more money than in any year since at least 1987, excluding extraordinary gains related to its bankruptcy. It added market share in the U.S. while cutting discounts and took back the title of world’s largest automaker from Toyota Motor Corp.

But some diseased chickens are coming home to roost. One is the mess at Opel, GM’s European division that CEO Akerson decided to keep when he took office (big mistake), and the “biggest contributor to GM’s $14.7 billion in European operating losses since 1999,” says Automotive News.

The other big bleeder is GM’s underfunded pension plans—$22.3 billion in the red at the end of 2010. Morningstar, among others, recommends that the company begin putting excess cash into this gaping hole rather than increasing its dividend.

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A New Volkswagen Phaeton Still Wouldn’t Make Sense

Phaeton or Passat?

Price a Bentley in America at just under a hundred grand and they won’t be able to make enough of ’em.

Price a Volkswagen at almost a hundred grand and no one will touch it, even if the only difference between the two cars is the logo on the grille. That’s the power of branding and a little thing called “perceived value.” Buyers love to feel like they got a deal, and they hate to feel like they got ripped off.

That’s why Volkswagen’s luxurious Phaeton remains a mystery. When it was for sale in the U.S., there was no value proposition. Prices started at close to $70,000 and quickly escalated. No one wanted a $100,000 car that looked like a Passat. It didn’t matter that the car was as luxurious and powerful as a Bentley. No amount of hand-crafted materials or double-stitched premium leather could overcome a poor price-to-brand value equation. Not surprisingly, the car didn’t sell here, and the Phaeton experiment was killed.

But VW wants to try again. With the exact same formula.

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Green Update: Tesla’s Model X EV Crossover

Tesla Model X, doors open

Describing a car with all its doors open, somebody once said, “It looks like an unbuttoned double-breasted suit.” So does the Model X with its “falcon-wing doors.” These are gullwing doors hinged to fold inward as they rise, permitting easier entry.

Car and Driver called it “mostly a gimmick,” which it is. I would not want to be inside this car in a rollover. Otherwise it is basically a Model S, but stretched to take 7 passengers. Buyers can choose AWD with a second electric motor driving the front wheels and 0-60-mph times (maybe) of 4.4 seconds.

Two batteries are available—with 60 or 85kWh, giving a range of about 215 or 270 miles, respectively. The car is going to be 10-12 percent heavier than the Model S sedan, which already weighs 4,700 pounds. So the S should perform a bit better, unless you get the AWD model.

Prices will be in a range similar to the S, from about $49,900 to $97,900, depending on options, batteries, etc., and this includes the federal $7,500 tax credit. But Model X won’t be available until 2014. Still, Tesla is taking $5,000 deposits and has already gotten several. The S will start selling in July.

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For Sale: Used Car, $30 Million, OBO

Ferrari 250 GTO

Most of us will never spend more than $50,000 on a car. And that’s being generous, I think, considering the average sales price of new vehicles is just about $30,000.

I tend to lean toward the used-car side of things, as prices in CarGurus’ used listings are generally much more palatable. I say “generally” because, occasionally, a used car will come along that commands a price no new car will ever fetch.

Top Gear tells us that one of the most desired, and valuable, cars ever produced recently changed hands in a $31.8 million transaction. The car, a 1964 Ferrari 250 GTO, is now the second most valuable vehicle ever sold. A 1936 Bugatti Type 57SC Atlantic still holds the record of number one, though just barely.

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Who Do You Want Running Your Car Company?

Dan Akerson at a GM Town Hall meeting

We thought it might be enlightening to look at the CEOs of three of the largest car companies so you can decide whom you want to replace Henrik Fisker (Monday joke, of course). We didn’t include Alan Mulally, because most of you know his record at Ford.

Dan Akerson, 63, came to General Motors in 2010 after five years in the Navy and wide business experience, mostly as head of global buyout for the Carlyle Group and in telecommunications. He had a track record in private equity but not in manufacturing or autos.

So, despite coming in cold, Akerson is a turnaround guy and, according to most analysts, has done extremely well in bringing back GM from the dead, paying back government loans, and making saleable and respected product again.

It has been a dramatic transformation, one not without costs to those whom GM’s bankruptcy burned. Most of you know about the success of cars like the Chevy Cruze and the Buick Verano. The Volt has been a disappointment but was an experiment that may yet pay off.

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2013 BMW M6 Coupe and Cabriolet: Pics and Specs

2013 BMW M6 Coupe

There’s nothing wrong with taking the time to dream on a Monday morning, right?

Few objects provide the muse for dreaming like a BMW M6, and the automaker has dropped some official pictures and details on the all-new dream-worthy 2013 M6 Coupe and Cabriolet before their debuts at the 2012 Geneva Motor Show and 2012 New York Auto Show, respectively.

The M6, with or without a roof, will be a hard-to-miss car. The fenders are gently flared to accommodate 19-inch ultra-high-performance summer tires, and the traditional “gaping maw” front bumper feeds air to its twin-turbo 4.4-liter V8. A set of five-spoke wheels show off the car’s massive brakes. The rear bumper is new, with a new diffuser that houses quad tailpipes. A small “M6″ badge sits offset in the front grille, providing an understated visual reminder of this car’s raw power.

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Kia’s Track’ster Stealing the Show at Chicago

Kia Trackster concept

Now this is one smart and smart-looking concept. It’s based on the Kia Soul, but with 250 hp instead of the standard 164. There are two big problems, however:

1. The company says there are no plans to put it into production. (Then why was it shown at Chicago if not to assess this?) 2. Kia’s marketing people should stop fooling with apostrophes. It is confusing and stupid.

An apostrophe indicates either a possessive (see my title) or that something has been left out. But in fact, what’s been added to the Soul is style and much more power.

The Track’ster brings many welcome changes to the Soul, which I always thought supremely ugly, like a giant stepped on the rear roof. This car looks better, largely because of the rear-end hatch treatment. The Trackster (no apostrophe) is longer and wider with big fender flares, and it’s a coupe, with tools and racing gear behind the seats.

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The 6 Best Ways to Beat Range Anxiety

Nissan Leaf at a charger

Range anxiety is treatable.

While I’m not sold on the serious need for electric vehicles, I acknowledge that we’re likely to see more gas-less motor cars swishing through our cities in the coming years.

I see three big problems with EVs:

They have an extremely limited range (which varies according to many factors, including temperature, traffic conditions and speed). There is no mass infrastructure to recharge them. The electricity they use still must be produced somehow. (Coal? Nuclear?)

Infrastructure can be built and more nuclear plants can go live to pump more electricity into our failing grid. But there’s not much that can be done to change the fact that batteries in electric cars will empty much faster than they recharge. So how can you deal with the anxiety of not making it home once you venture out in your new electric car? Keep reading, friends.

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Finally, Mazda Presents the 2013 CX-5

2013 Mazda CX-5, front

For a company that makes good full-size SUVs, we have wondered for some time why Mazda hasn’t made a smaller one. Well, now it has.

Only thing is, the CX-5 needs more power to compete with cars like the Honda CR-V. But it costs less and gets better mileage. And comes with a lot of stuff standard, in three trims, starting at $20,695. The top-of-line CX-5 Grand Touring ups the ante to $28,295; the AWD model costs $23,345. Lots of goodies to choose from.

But right now, you get only one engine—a 2-liter with 150 hp (at 6,000 rpm) and 150 lb-ft of torque. The press release:

All 2013 CX-5 models are equipped with the SKYACTIV-G 2.0-liter gasoline engine. At 13:1, SKYACTIV-G features the world’s highest compression ratio for a mass-produced car. By comparison, a Ferrari 458 Italia supercar has a compression ratio of 12.5:1.

Mazda thought you’d like to know that in case you were thinking of buying an Italia instead.

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Cars Coming Soon: 2012 Ram Laramie Limited Proves There are More than Two American Truck Companies

2012 Ram Laramie Limited, Chicago Auto Show

The two truck companies in America are:

Ford and Chevrolet.

While the good folks in Auburn Hills may note a certain brand missing from that short list, General Motors marketing chief Joel Ewanick believes his company and the Blue Oval are the only two truck builders worth mentioning.

In a chat with Jalopnik, Ewanick said that “the two big players are Ford and Chevy” and then added that it’s like a presidential debate, saying, “We want to have it with the other strong candidate—and we want to engage them and want them to engage us.”

Not “other strong candidates,” but the singular version. Candidate.

Going on numbers alone, his argument makes sense. The Ford F-Series sold 584,917 trucks in 2011. The second-place Silverado scored 415,130 sales. The rest, including the RamToyota Tundra and Nissan Titan, didn’t even come close.

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