Delphi, UAW, GM square off
It’s not hyperbole to claim that the future of General Motors hangs in the balance. A strike would essentially shut down GM plants, as the automaker relies on Delphi for much of the auto parts that go into its cars. With what GM estimates is a liability of anywhere between $5 to 12 billion, a strike by Delphi workers could cost the automaker upward of $1 billion a week, draining resources GM needs to complete it’s recovery.
Faced with this growing threat, as well as its own costly recovery plan and downgraded bond rating, GM had little choice but to sell 51 percent of GMAC for $14 billion, a move that gives GM some needed cash. Many auto industry watchers believe that GM is building up as much reserve cash as possible, so that they will be able to avert a Delphi strike by subsidizing union wages. Up next? Look for GM to sell its stake in Isuzu motors, and gain about $335 million.
Meanwhile, GM is also dealing with two new government investigations into its accounting practices. Previously, GM had received subpoenas regarding pension and retiree accounting, along with its Delphi transactions. According to the automaker, last week the government also sent subpoenas about precious raw material transactions, and supplier credits.
Value pricing a hit
MPG requirement goes up
That may help – at least a little. Heck, it all helps, just as the recent ruling by the EPA regarding diesel vehicles helps. According to the EPA, diesel cars and light trucks built in 2007 through 2009 will be clean enough to drive in all states. Do you hear that, California? DaimlerChrysler (DCX) wants to make sure California knows, as it is one of the largest market for cars, and DCX has made significant investment into diesel technology – as have the likes of VW. The ruling is thanks to advances in engine technology and low-sulfur fuel, all of which make diesels 30 percent cleaner and offer improved fuel economy. See, there’s more energy in a gallon of diesel compared to gasoline – so it goes farther. According to the EPA, if one third of all sport utility vehicles and pickups were diesels in 2020, the United States could save as much oil as it currently imports from Saudi Arabia.
New York Auto Show
Other notable debuts include a raft of new vehicles from Saturn, including the Saturn OUTLOOK – a new eight-passenger crossover on a new platform, the Saturn Sky Red Line – powered by a hair-raising, 260-horsepower, 2.0-liter direct injection turbocharged engine, and the Saturn AURA sedan. There will also be an unknown Saturn concept. Rest assured that dent resistant panels will not be part of that model.
Not that dent-proof panels are a bad thing – especially if you’re blind. According to the Chicago Sun-Times and The Car Connection, there’s a potentially growing market for cars blind drivers can operate, as dozens of blind students in Chicago public schools are required to take driver education classes.
Photos courtesy of the automakers