RKMBs Forums .::Important::. Politics and Current Events Democrat Leaders Want Automaker Bailout

Louisiana governor Bobby Jindal has announced that San Diego-based V-Vehicle will create 1,400 new jobs and assemble an all-new vehicle in the state. This follows days of speculation about a significant auto assembly plant announcement in Monroe, in the northern portion of Louisiana.

VVC, as the company is also called, "wants to reestablish American leadership in the global automotive industry," according to a Louisiana Economic Development (LED) info-sheet.

V-Vehicle was founded by ex Oracle Corp. executive VP Frank Varasano and is definitely not struggling to gather funds; it's being financed by well-known California venture capitalists—including some also backing Fisker Automotive (Silicon Valley firm Kleiner Perkins Caufield & Byers)—along with T. Boone Pickens.

We haven't yet seen pictures of the vehicle, but we do know that it was designed by Tom Matano, the 'father' of the original Mazda Miata. Matano also worked on the RX-7 and 929, and held positions at General Motors and BMW prior to that. He has most recently served as director of the school of Industrial Design at Academy Art San Francisco.

TheCarConnection.com has a lot of confidence in Matano, who's a strong believer in designs that still look good after a few years as opposed to those that go to extremes. “A model must be in a reasonable range to be successful," Matano told this editor in a 2006 interview. "It could be too futuristic, and buyers could call it ugly, or just too far beyond the current range of expectations."

"This car will be another icon of American industry," said Matano in a video from the LED. "Miata may be the iconic car in the last 25 years; this will be the iconic car in the next 25 years."

The plan for the plant, which was formerly occupied by the Guide Corporation, came together with $67 million in state incentives and $15 million in local funds, according to the Associated Press. VVC has also applied for funding for this so-called "All-American Car" through the Advanced Technology Vehicle Manufacturing Loan Program, which confirms that the vehicle is likely either an electric vehicle or a plug-in hybrid combining another alt fuel.

"The thing that excited me the most about V-Vehicle is that it is a holistic change, so we're thinking about—from beginning to end—how to reconstruct a car company," commented KPCB managing partner Ray Lane.

"What we're doing of course is trying to create a new American car company," said CEO Varasano.

Alongside this post, we've pasted some quick screen shots from a promotional video for the development. While we can't guarantee that these are sketches of the upcoming VVC vehicle, it's likely. Note the clean, simple dash design, sports-car-like gauge cluster, and a cradle for iPods or PDAs.

This is all on the fast track. Construction and retooling for the 425,000-square-foot plant will begin later this summer. About two-thirds of the 1,400 new jobs will be directly through VVC (average annual salary of about $40,000), with the remainder through co-located supplier companies. Production at the plant is expected to begin in summer of 2010.

U.S. sales at Ford and Chrysler last month offered sharply different views on the downtrodden U.S. market for cars and trucks, while General Motors Corp. held its own even though it entered bankruptcy protection.

Ford's June sales showed signs of stabilization, as the healthiest Detroit automaker posted its smallest sales decline of the year at 10.7 percent. It also said it gained market share. But Chrysler Group LLC, just weeks after exiting bankruptcy protection, reported a 42 percent drop in sales, hurt by a big cut in fleet sales and declines in all its models except the Dodge Challenger muscle car.

GM reported a 33.4 percent sales drop, slightly larger than the 30 percent drop it reported for May before it entered bankruptcy protection. GM plans to sell or close Pontiac, Saturn, Hummer and Saab to focus on four core brands — Chevrolet, Cadillac, GMC and Buick.

June sales from other automakers indicated that the industry downturn has begun leveling off. Toyota's U.S. sales fell 32 percent in June to 131,654 units — a smaller decline than in previous months for the Japanese automaker.

Economists say there are signs that the economy is recovering, with housing starts rising more than expected in May and wholesale prices remaining in check. But the Conference Board reported Wednesday that consumer confidence fell unexpectedly in June.

"We're making steady progress," Jim Farley, the company's group vice president of marketing, said in a statement. "We remain grounded, however, given challenging industry and economic conditions."

Analysts predict that June sales, adjusted for seasonal variances and multiplied to determine an annual rate, will top the 10 million mark for the first time this year. During several months earlier in 2009, U.S. car and truck sales dropped to a rate of about 9 million vehicles, a huge reduction from more than 16 million as recently as 2007.

But any jump in the annual rate could be fueled by fire-sale prices at 789 Chrysler dealers that were fired by the company during the bankruptcy process and told to get rid of their inventory by June 9. Also, with GM dropping its Pontiac brand, incentives will rise on those models.

Toyota's top-selling Camry midsize sedan saw sales fall 37 percent while Corolla compact sales plunged 53 percent.

One bright spot for Toyota was its recently released third-generation Prius, which saw sales rise 10 percent. Prius sales had suffered in recent months as gas prices plunged from more than $4 per gallon last summer to below $2 a gallon in the winter.

Nissan Motor Co., the No. 3 Japanese automaker, also enjoyed a better month. Its sales fell 23 percent to 48,298 in June on sales declines of its top-selling Altima sedan. The automaker sold 2,137 units of its boxy Nissan Cube in its first month of sales, while sales of its 350/370Z roadster climbed 11 percent.

Dearborn, Mich.-based Ford Motor Co. has seen its market share grow while rivals Chrysler Group LLC, which emerged from bankruptcy protection on June 10, and General Motors Corp. struggle.

The monthly decline was Ford's smallest since July of last year, a sign of life amid the worst slump in 27 years. Ford sold 154,873 cars and light trucks last month, with strength in its midsize Fusion and the Flex crossover vehicle.

Chrysler said it sold only 68,297 vehicles last month, despite fire-sale prices at 789 dealerships that the company terminated.

Ford's surprisingly low decline came after a string of months in which it and other automakers reported year-over-year drops of more than 40 percent. Ford's sales were down 24 percent in May and off 37 percent for the first five months of the year.

"The important takeaway is that we're not going backward, we're not slipping back," Ford's top sales analyst, George Pipas, said Monday.

Ford is the sole U.S. automaker to avoid bankruptcy protection and it's the only one not receiving government loans to keep from running out of money. GM and Chrysler are receiving billions in loans, and GM inching its way closer to escaping Chapter 11.

In anticipation of increased traffic at dealers and higher sales later in the year, Ford announced Monday that it would boost its third-quarter production by 25,000 vehicles.

Mark Finkelstein

• This was inevitable. When the Obama administration effectively took over General Motors, Obama-friendly media hacks were going to tout the company's products . . .
  
  And so it was that on his MSNBC show this evening, Ed Schultz offered up an unpaid infomercial for GM's new Camaro. Most grotesque was Schultz's boast that the Camaro was outselling the Ford Mustang. Take that, private-sector company that declined to take Obama's dime!

I think you're missing (or obscuring) the point. According to the New York Times, the Camaro outsold the Mustang by a mere 1500 cars during the month it (the Camaro) was first out. That is hardly surprising since it was a new model, featured in the Transformers film, and was up against the older Mustang. None of this has anything to do with the bailout.

Furthemore, if you think about it, the Camaro is the opposite the kind of cars that Obama wants GM to market and sell...and the opposite kind of car that liberals like Schultz have been calling for. Yet, here is Schultz, doing a free commercial for a gas guzzling muscle car, all because it makes Obama look good to promote GM products.

I think it's pretty obvious that neither Finklestein or I want any legitimate company to fail. The point he--and I--was making is that its hypocritical (if not unethical) for the liberal partisans to start touting GM cars (over other brands) for no reason other than to make the President look good.

Those shows schill for the GOP.

So you're saying that GM=the Democratic Party now?

You said that Schultz was doing the liberal version of a Sean Hannity or Glenn Beck show. You also said that Hannity and Beck "schill for the GOP."

Therefore, if Schultz was (as you claim) doing the liberal version of Hannity/Beck he was shilling for the Democrat Party when he was touting Camero products.

That falls into a matter of your opinion that Schultz was doing that. I'm guessing he has a show much like Sean Hannity or Glenn Beck have a cable show and you don't like the spin. Those shows schill for the GOP. Personally I'm fine with that as long as it doesn't fall into dishonesty and intentional missinformation.

I said he was MSNBC. Everyone knows that means he's a liberal partisan

I said he was MSNBC. Everyone knows that means he's a liberal partisan

Alternative Energy: A government report says reliance on electric cars will do little to reduce greenhouse gas emissions and may merely shift our dependence on foreign sources from one set of dictators to another.

It's a beautiful theory — highways full of electric cars emitting no greenhouse gases or pollutants after being plugged into an outlet in our garages overnight. The problem, according to a new Government Accountability Office report, is that the effort may only shift the problem somewhere else.

"If you are using coal-fired power plants, and half the country's electricity comes from coal-powered plants, are you just trading one greenhouse gas emitter for another?" asks Mark Gaffigan, co-author of the GAO report. The report itself notes: "Reductions in CO2 emissions depend on generating electricity used to charge the vehicles from lower-emission sources of energy."

The GAO report says a plug-in compact car, if recharged at an outlet drawing its power from coal, provides a carbon dioxide savings of only 4% to 5%. If the feeling of saving the environment from driving an electric car causes people to drive more, that small amount of savings vanishes entirely.

It's much the same effect we saw when the Corporate Fuel Economy Standards were passed in the '70s. Aside from forcing us into less-safe downsized vehicles that increased highway fatalities, the promise of more miles per gallon caused people to drive more miles. The promised energy independence never materialized as we imported more foreign oil than ever before.

Okay, so how about a zero-emission source of electricity — nuclear power? The administration has done little to promote it beyond lip service. The administration recently killed the safest place on the planet to store what is erroneously called nuclear waste — at the nuclear repository that was being built at Yucca Mountain, Nev.

This "waste" is in the form of spent fuel rods the French and others have safely stored and reprocessed. These rods still contain most of their original energy and reprocessing them makes nuclear power renewable as well as pollution-free. The French get 80% of their electricity from nukes, and nobody in Paris glows in the dark.

They will have a place to plug in their electric cars, but right now we don't. The government is promoting solar and wind, which is fine if the sun is shining and the wind is blowing. Both have their own environmental drawbacks.

Both require huge amounts of land. Wind turbines tend to slice and dice birds, including endangered species. Solar panels of the size that might be competitive require huge amounts of water to clean. Water is a rare commodity in the areas the sun shines most — the arid land of the West and Southwest.

There are the hazards of the cars themselves. We don't yet fully comprehend the hazards to drivers, passengers and first responders after, say, a collision between an electric clown car and an 18-wheeler. Then there's a whole new problem of disposing of a new generation of batteries using lithium.

As for the lithium, Bolivia, under the thumb of its leftist leader Evo Morales, has about half the world's proven reserves. "The United States has supplies of lithium, but if demand for lithium exceeded domestic supplies," warns the GAO, "the U.S. could substitute reliance on one foreign source (oil) for another (lithium)."

Then there are environmental consequences. Just as coal and oil must be extracted from the earth, so must lithium. "Extracting lithium from locations where it is abundant, such as South America, could pose environmental challenges that would damage the ecosystem in this area."

While advertised as "zero emission," electric cars have their own set of issues. As physicist Amory Lovins once put it, "Zero-emission vehicles are actually 'elsewhere-emission' vehicles."

Perhaps you may want to expand on this comment since obviously Buchana and other conservative pundits are also MSNBC and clearly are not liberal partisans.

I see you're still not actually reading the posts before writing on the threads. I addressed this earlier today.

Hey if you didn't exagerate so much there wouldn't be a need to clarify... Mmem!

DETROIT -- Former General Motors Corp. Chairman and CEO Rick Wagoner will retire Aug. 1 with a pension and benefit package the automaker valued at more than $10 million.

Wagoner, 56, who was ousted by the Obama administration on March 30, will get $1.64 million in benefits annually for each of the next five years, plus an annual pension of $74,030 for the rest of his life, according to company documents filed Tuesday with the U.S. Securities and Exchange Commission.

The former CEO, who spent 32 years with the company, can also choose to cash out his company-provided life insurance policy at $2.6 million, according to the filing.

The benefits are worth about half the $22.1 million value that the company placed on Wagoner's retirement package at the end of 2008. The severance package is also far smaller than those afforded to many other large-company CEOs in the past, before the market meltdown made compensation practices a touchstone for public and congressional outrage.

Lee Raymond, former chairman of energy giant ExxonMobil, received a nearly $400 million retirement package in 2006. Stan O'Neal, ousted from Merrill Lynch in 2007 after the investment bank reported a huge quarterly loss, walked away with $161.5 million in stock, options and retirement benefits. Walt Disney Co. directors awarded a $140 million severance package to Michael Ovitz at the end of his brief stint in the mid-1990s as president of the entertainment company.

Although many GM retirees whose benefits have been cut or investors who lost money may consider Wagoner's package excessive, it is not out of line in comparison to other executives' pay, said Aaron Boyd, a research manager with Equilar Inc., an information services firm that specializes in researching executive compensation.

"For a company making billions of dollars in revenue, an executive regularly making millions of dollars every year, I think a $10 million retirement package, considering the length of time that he's been with the company, I think it's certainly understandable," Boyd said.

Wagoner's package comes at a time when the company slashed benefits for most of its retirees, including eliminating vision and dental coverage. Health benefits for blue-collar retirees also are somewhat at risk because they soon will be paid by a union trust that is largely funded by stock in the new GM.

Wagoner was credited by industry analysts with restructuring GM more than any other CEO in its history, shedding thousands of jobs while globalizing and energizing its vehicle design, engineering and manufacturing.

But since he became president and CEO in 2000, the company's shares have tumbled in value. In 2000, GM shares topped $92, according to the Center for Research in Security Prices at the University of Chicago. Trading of the stock, which stayed with the old GM still in bankruptcy protection, was suspended as of Friday at $1.15 per share. The company has said repeatedly that it likely will have little or no value.

In the past four years, GM has racked up more than $80 billion in losses as the recession and high gas prices cut into its sales.

Wagoner's ouster came at the hands of former Obama administration autos task force leader Steven Rattner, as the administration rejected a GM restructuring plan and ordered deeper cuts.

Wagoner has remained on the GM payroll since his ouster, but he had been working for $1 per year since late last year. Company spokeswoman Renee Rashid-Merem said GM disclosed last year that it had annual pensions for top executives by two-thirds.

GM has received $50 billion in U.S. government loans. On Friday, the automaker emerged from a 40-day stay in Chapter 11 bankruptcy protection with its best assets moving to a new company called General Motors Co. The U.S. government owns more than 60 percent of the new company, with hopes of selling stock to get some of its investment back, perhaps as soon as next year.

Wagoner earned $14.9 million last year at GM, although $11.9 million of that was in the form of stock and options which are now worthless.

He also was entitled to $366,602 in unvested stock awards and $534,627 in deferred compensation as of Dec. 31, according to GM's 2008 annual report. At the time, Wagoner got to keep about 3 million stock options, which allow him to buy GM shares at prices ranging from about $20 to $76.

As a condition of GM's government loans, the automaker is not allowed to pay severance packages to departing executives. Government officials began to crack down on so-called "golden parachutes" after last fall's backlash over $24 million in exit packages for the ousted chief executives of mortgage finance companies Fannie Mae and Freddie Mac. The severance payments were never made. Former AIG chief Robert Willumstad opted out of his $22 million severance package after being deposed as part of the insurer's government bailout last September.

From the beginning of his career at GM through the end of 2008, Wagoner received compensation totaling about $63.3 million, with $38.7 million of that coming during his years as chief executive. The totals take into account Wagoner's base salary, cash bonus payouts, long-term incentive plan payouts, gains from stock option exercises, and other compensation.