From the December 2017 issue The 20th century dominance of American car companies, thanks to corporate oligopoly and labor monopoly, started eroding with the Japanese invasion of the 1970s and 1980s. In this century, they have careened from vestigial dominance to historic bankruptcy (Ford alone escaped) to remarkable recovery and—recently—to frustration and humiliation at the hands of a Silicon Valley upstart. For much of 2017, investors valued Tesla higher than General Motors, Ford, and Fiat Chrysler Automobiles even though, in 2016, GM sold more cars every three days than Tesla sold all year. This roller-coaster ride isn’t over. The industry is going through four simultaneous revolutions: propulsion, connectivity, automation, and community (meaning ride services like Uber). The four portend an era of continuous change, even if people don’t forgo car ownership en masse. Many people already have the same emotional bond with cars as they now have with … [Read more...] about Detroit Automakers Are Driving in Different Directions Toward the Tech-Filled Future
S p 500 futures
Despite all the bad news going around these days about heavy losses and declining sales, do you feel bullish on the future of the domestic auto industry? Then why not put your money where your mouth is and pick up a few shares of stock? Ford fans are especially in luck, since as part of its plan to turn around financially and revamp its lineup, the company is now selling an additional $500 million worth of new shares to raise some extra cash. Though presently there’s no time frame on when it will be completed, the transaction will be handled by Goldman Sachs, and Ford plans to use the proceeds to buy bonds from struggling Ford Motor Credit, which will reduce the company’s overall debt. Over the past year Dearborn has strengthened its balance sheet by swapping nearly $927 million in debt for equity, although as of yet the move has done little to improve the automaker’s Standard & Poor rating. The S&P does say, however, that it would view the debt purchase … [Read more...] about KaChing! Ford selling $500 million in new stock
When things evolve slowly it’s easy to overlook the distance that’s been covered. For example, you might not notice the changes in the mirror every morning, but your high school friends at your reunion will. In the same respect, sometimes to be able to appreciate just how amazingly advanced hot rodding has become in the past several years it requires taking a step back and looking with fresh eyes. Much like the tech industry at large, revelations, discoveries, and applications of technologies to create new and improved products and custom cars come so steadily nowadays that overall most of us remain largely unimpressed by the latest news. It’s just another hot rod with high-end parts, right? That ennui is unfortunate because the people working to advance the hot rodding industry do it out of passion, and that really shouldn’t be taken for granted. These guys just want to help us all build better cars. The result of that pursuit has created a shift in the hot … [Read more...] about 16 Hot Rodding Trends and Technologies – The Future Is Now!
Crude oil futures surged to $108.21 a barrel today, the highest since trading began in 1983. Meanwhile, the S&P 500 and Dow averages, gold, platinum and other metals all dropped. Call it speculation, but with surging demand in China, investors currently view rising oil futures as a safer bet than anything else on Wall Street these days. "The grab for hard assets is on due to the lack of confidence in the rest of the markets at the moment." said John Kilduff, senior VP of energy at MF Global Ltd. in New York. Houston investment banker Matt Simmons sees prices heading to $120, "in the short term." Simmons, also known for Twilight in the Desert— his inductive analysis of Saudi oil fields– says, "I'm one of the few people who's not surprised to see crude at $107. I still think it's a bargain." Still, others worry about a ceiling. "The perception in the financial community is that the oil market is the one safe harbor," said Rick Mueller, director of oil practice at Energy … [Read more...] about Oil Prices: Up, Up and Away
The flying car is… not a lot closer than it was when a puppet named Mike Mercury took Gerry Anderson's Supercar into the wild blue. According to CNET News, NASA is attempting to rectify the non-situation by stumping up some $2m in prize money for developers of “small seat” experimental airplanes. The space agency's Personal Aircraft Vehicle (PAV) Challenge replaces the agency's in-house development process in favor of "chaotic innovation or ideas hatched in people's garages." PAV fans envision a future where small auto-piloted planes ferry people on “midrange” trips between 100 and 500 miles at speeds up to 150mph. Technologies such as virtual pilot assistants and synthetic vision systems (SVS) could remove pilot error (substituting computer error?) and create virtual highways in the skies. "We're looking at making planes cheaper than cars and as easy to drive.” says pilot Michael Coates of Australia. [BTW: Anderson said he invented Supercar as an … [Read more...] about NASA: Flying Cars are P-A-V!
With GM’s share price slipping below $30, the cries are going up again around the internet about the government’s stake in the bailed-out automaker. Thus far the Treasury has remained mum on its exit strategy, only indicating that it would emphasize speed rather than maximum return as it charted the course for its sell-off. But now, Reuters reports that “a big chunk” of the government’s 33% remaining stake in GM could be sold “in the summer or fall.” With the government’s shares “locked up” until May 22, that could mean the government is bailing as quickly as possible at a time when GM’s stock is hitting post-bankruptcy lows, and its CEO offers little in the way of explanations beyond blaming the Japanese tsunami and rising fuel prices. The Wall Street Journal figures taxpayers would lose $11b on its “investment” in GM equity if the government sold at today’s prices (the stock must hit $53 for … [Read more...] about “Government Motors”: The Exit Strategy
Editor’s Note: Legendary auto journalist and TTAC inspiration Jerry Flint died this week. Rather than write a sappy eulogy, we’ve decided to let Jerry speak for himself. What follows is a speech Flint gave to GM employees at Milford Proving Grounds in October 2000. It’s feisty, passionate and deeply insightful… the kind of speech that made Jerry famous, and paved the way for sites like TTAC. Moreover, it shows just how deep GM’s problems run, and serves as a timeless warning against the worst impulses of the business. Rest In Peace Jerry… we will always remember you at your best. [Courtesy: The Olds Zone Hat Tip: Ken Elias]There was an auto executive, he was a very high ranking GM man. You all know his name but I won’t mention it because it might embarrass him. He’s not at General Motors anymore.I once asked this man what he would do if he found himself the chief executive of General Motors. He said, and I … [Read more...] about Jerry Flint (R.I.P) Lays Into GM, October 2000
At about the same time Barack Obama was figuring out where to store his paper clips and Post-it notes in the Oval Office, Fiat S.p.A. and Chrysler LLC were busy trying to inaugurate a new partnership that almost no one saw coming. News that Fiat will take a 35-percent stake in struggling Chrysler (the majority of which is owned by Cerberus Capital Management) could not come at a better time. If any of Detroit’s Big Three would fall, Chrysler would be the first, and this alliance at least gives the Pentastar a glint of hope for survival. A dearth of new product suggested that Chrysler was merely buying time before the creditors came knocking or its government loan money ran dry. Even with the $4 billion it received last month from the U.S. government, Chrysler’s near-term prospects for recovery appeared slim to none. Some might say they still appear that way. With little in the way of global sales to generate cash flow—unlike, say, … [Read more...] about Chrysler and Fiat Alliance: Future Product Speculation
During the 1950s, the Indianapolis Motor Speedway and its owner, Tony Hulman, enjoyed a charmed existence with Memorial Day weather. Every year, it seemed, race day dawned to bright blue skies and puffy clouds. The Brickyard's current impresario, Hulman's grandson, Tony George, has had no such luck. In the past five years, which were among the Indy 500's most controversial, the 1997 race was postponed two days by rain and the starts of the 1998 and 2000 races were delayed several hours. The entire week before the 2001 race, the Hoosier state was stuck in what meteorologists called a "toilet-bowl low." It was a massive, slowly rotating system that rained on George's track all week, as if all the enemies he has made since he seized control of the Indianapolis 500 in 1996 were flushing the toilet on his head. Two days before the race (which was briefly interrupted twice by rain), George had his umbrella in hand before stepping from the media center into another … [Read more...] about Racing’s Two-Ring Circus
General Motors CEO Mary Barra will be the automaker’s first female chairwoman of their board of directors, the automaker said Monday.Barra takes over for Tim Solso, who will remain on the board.Barra took over as CEO two years ago and is GM’s first female CEO. When Barra took over as CEO in January 2014, the automaker split the role of CEO and chairman following Dan Akerson’s departure.In a statement announcing the move, outgoing chairman Solso said merging the two made sense for the automaker.“At a time of unprecedented industry change, the Board concluded it is in the best interests of the company to combine the roles of Chair and CEO in order to drive the most efficient execution of our plan and vision for the future,” Solso said in a statement. “With GM consistently delivering on its targets and on track to generate significant value for its shareholders, this is the right time for Mary to assume this role.”In combining the two roles, … [Read more...] about Barra Named General Motors’ First Chairwoman