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Cadillac Needs Diesel. We All Do. Badly.

Haven't seen a Bugatti Veyron for rent yet, but hey... you never know

Haven't seen a Bugatti Veyron for rent yet,
but hey... you never know

You wouldn’t think the best part of planning a trip to Ireland would be selecting a rental car.

But it dawned on me today as I browsed the Irish car offerings… I’ll have a whole world of cars at my fingertips that I can’t even touch living here in the U.S. I can rent a Ford Fiesta, an Opel Corsa, a Peugeot 206… a Mercedes C-Class diesel.

Maybe they’re not the greatest cars in the world, but it’s like an all-you-can-eat buffet of nothing but desserts for me - pure heaven.

I’m also wondering (again) why in the world we don’t have as many diesel options in the U.S. as Europeans do. I know the automakers like to say it’s because Americans haven’t gotten over our poor experience with the dirty diesels of the past. Those days are over, though, and cars like the VW Jetta TDI are proving that diesel works.

Edmunds’ AutoObserver posted a story about Cadillac’s diesel plans, which says,

GM product-development higher-ups are adamant that diesels are too costly for the U.S. market. They require complex and expensive exhaust aftertreatment (”onboard chemical factories” is one term repeatedly employed) to comply with the world’s toughest diesel-emissions standards - and U.S. diesel fuel is not taxed advantageously, as it is in Europe, where diesels have captured more than half of the region’s light-vehicle market.

I came to three conclusions from that quote:

  1. GM is putting the idea of a diesel that conforms to U.S. emission standards in the “too hard” pile. (It’s not too hard for VW, BMW, or Mercedes, though.)
  2. Selling gasoline provides the government with more tax revenue, so selling more diesel just doesn’t make sense.
  3. Europe is smarter than the U.S.

Considering the U.S. is about two decades behind Europe in diesel offerings, we’d better get on the ball, or we’ll completely miss the electric-vehicle movement too.

Consider this:

Germany’s government has announced its intent to get one million EVs on the road by 2020, largely through financial incentives offered to Germans who buy electric.

All I can do is thank the stars that we finally have a president who understands the importance of alternate fuels and is investing in America’s electric automotive future. As a friend recently said,

I think it’s great that Obama seems to take our gas/car problem seriously and has invested significant money in battery technology here. Nice that we got rid of the oilman who seemed perfectly content to let American automakers keep building cars that would ensure his buddies would keep making money hand over fist.

Amen, brother!

Will the U.S. ever catch up with Europe, or will it always trail in automotive innovation?

-tgriffith

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Tectonic Shifts Around the World in the Car Biz

The twisted Porsche/VW sale

Porsche CEO Wiedeking. Why is his thumb pointed down?

Porsche CEO Wiedeking: note thumb pointing down

A complicated story today got more complicated. It was reported widely yesterday that Porsche Automobil’s main shareholders (the Porsche and Piech families) were going to sell the sports-car business (Porsche AG) to its Volkswagen unit in order to reduce the holding company’s debt.

Today they denied it. Seems the cost of debt is rising along with the bad economy, and the company must look for other assets, which it has, if it wishes to follow through on its announced intent to buy around 75 percent of VW’s stock (it now owns 51 percent). All this sounds crazy but makes some kind of sense, as our friends at autoblog thankfully explained:

Wait, what? Didn’t Porsche just buy Volkswagen? Well yeah, for the most part. The parent company Porsche Automobil Holding SE holds majority interest in the Volkswagen group, and is planning on buying more. But in order to do so, the rumors suggest, the holding company would have to sell its auto manufacturing unit (Porsche AG) to Volkswagen, and then, we’re supposed to understand, turn around [and] buy another quarter of VW’s shares with the cash generated. (With us so far?) The put would undoubtedly drive Volkswagen’s shares up, generating more cash for VW and more debt for a hungry Porsche.

If these Porsche guys are so smart, how come they let the story leak before they had to deny it?

Fiat and Chrysler and Opel are dancing

sergio-marchionne1Another story leaking the rounds this week is Fiat’s possible interest in GM’s Opel. Boss Sergio Marchionne (left) reiterated he would not invest cash in Chrysler and that they were still trying to work a deal.

Yesterday, however, Reuters said Fiat and Opel were in talks: “GM needs to sell a big stake in Opel to get 3.3 billion euros (2.2 billion pounds) in loan guarantees from Germany and other European governments to rescue the troubled unit.” The question is whether Fiat could afford Opel after its recent larger-than-expected first-quarter loss. The company does have cash reserves of $6.6 billion, up $1.5 billion from last year.

It would seem Fiat is in a strong position even if the deal with Chrysler goes down.

Cheers! Ford loses only $1.4 billion last quarter; GM gets another $2B from the Feds

Happy (for now) Ford CEO Mulally

All the analysts are waving flags that Ford lost less than they predicted it would, and in this kind of upside-down economy, I suppose that’s good news. “Still,” as CNN pointed out, “the latest losses come on top of $30 billion in net losses the company reported from 2006 through 2008.” And the losses will continue “through at least next year.”

This recent news does reinforce Ford’s position as the healthiest of the Big Three, which is to say they only have pneumonia, not lung cancer. The government’s Intensive Care Unit is still operating at full capacity, however. Treasury announced today it had lent $2 billion more in funds to help GM restructure before its June 1 deadline. Chrysler could get up to $6 billion more if it works out the deal with Fiat… by Thursday. What a timeline!

These fiscal moves may not be tectonic shifts, per our headline, but they are surely seismic rumblings of what’s to come.

Which of these stories seems most important in your view? Tell us why, please.

—jgoods



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