Cars – Page 11 – Infinite Unknown

Peter Schiff: The Truth About Bailouts

November 25, 2008November 24, 2008 by Infinite

As the Federal bailout bonanza prepares to spread beyond the mortgage and financial sectors to fill Detroit’s depleted coffers, few economic or policy analysts have spared a thought for the destitution of the U.S. government itself.

Put simply, our government doesn’t have enough spare cash to bail out a lemonade stand let alone a bloated and failing industry that is losing tens of billions of dollars per month.

Washington can only offer funds that it has borrowed from abroad or printed. Unfortunately, the nation is in the grips of a delusion that money derived from these sources has the power to heal. But history has clearly shown that borrowed or printed money only has the power to destroy.

The argument that energizes the pro-Detroit camp is that the government should extend the same courtesy to the rank and file auto workers that it lavished upon the fat cats of Wall Street.

While two wrongs certainly do not make a right, the fact remains that the Wall Street firms are still floundering despite the bailouts. What’s worse, the money spent was either printed or borrowed from abroad. Both options are destructive to America.

When it comes to bailouts, the real discussions are not centered in Washington but rather in Beijing, Tokyo, and Riyadh. With no money of our own, our ability to bailout our own citizens is completely dependent on the world’s willingness to foot the bill.

Shining new, latest design and impossible to sell: Car trade in crisis

November 22, 2008 by Infinite

New cars wait to get loaded onto trucks

THEY sit parked in rows stretching as far as the eye can see, destined for a prolonged battering from the wind and rain as the global economic turmoil stalls sales. The world’s carmakers are also going nowhere fast, some teetering on the brink as they seek massive bail-outs to stay in business.

Britain’s manufacturers felt the chill yesterday, with Honda announcing a two-month halt to production at its Swindon plant from February.

It came as BMW’s Mini factory in Oxford closed for three days ahead of an extended Christmas break because of falling sales.

In a further sign of the gloom enveloping the industry, car production fell by a quarter last month to the lowest level for 17 years. Commercial vehicle making sank even further, down by 41 per cent.

Buyers, nervous about their financial security, are deserting the showrooms, with the trade in Scotland suffering its largest drop in sales last month since the early 1990s. Registrations plunged by 26 per cent to 10,190 compared with October last year.

Honda to close Swindon factory for two months

November 21, 2008 by Infinite

The plant’s 4,800 employees will be laid off for the duration of the closure, although they will still receive basic pay

Honda Jazz. Photograph: Garry Weaser/Guardian

Japanese car giant Honda added to the economic gloom today, announcing it is to shut its UK factory in Swindon for two months in February and March next year in response to falling sales.

The plant’s 4,800 employees will be laid off for the duration of the closure, although they will still receive basic pay, the company said. Some will be employed in training and on maintenance.

But the plan alarmed the unions, which believe Honda had considered plans to make 1,300 people redundant but opted to close the plant for two months to avert job losses.

Toyota Will Cut 3,000 Jobs in Japan as Car Sales Fall

November 21, 2008 by Infinite

Workers assemble engines of Toyota Motor Corp.’s Lexus LS600 hybrid sedan on the production line at its Tahara plant in Tahara, central Japan, on June 28, 2007. Photographer: Kimimasa Mayama/Bloomberg News

Nov. 21 (Bloomberg) — Toyota Motor Corp., Japan’s biggest carmaker, will cut its domestic temporary workforce by 50 percent as vehicle demand slumps globally.

Toyota will cut the number of temporary workers to 3,000 from 6,000 by the end of March, spokesman Paul Nolasco said today in a phone interview.

The automaker follows Mazda Motor Corp. and Isuzu Motors Ltd., which yesterday said they would slash a combined 2,700 temporary jobs in Japan in response to slowing sales. Earlier this month, Toyota forecast a 68 percent drop in full-year net income, the biggest decline in at least 18 years, as a global recession cripples auto demand.

Ford Sells $540 Million of Mazda Stock to Ease Crunch

November 18, 2008 by Infinite

Nov. 18 (Bloomberg) — Ford Motor Co., reeling from plunging U.S. car sales and a sinking share price, will raise about $540 million selling part of its stake in Japanese affiliate Mazda Motor Corp. to ease cash concerns.

The automaker will sell 20 percent of Mazda tomorrow, reducing its holdings to 13 percent, according to a statement today. Hiroshima-based Mazda said separately that it will buy back up to a 6.9 percent stake for as much as 17.9 billion yen ($186 million). The rest of the shares will be purchased by unidentified “strategic business partners.”

Auto bailout: Showdown

November 17, 2008 by Infinite

Should Congress bail out the Big Three? Here’s what lawmakers are considering and what’s at stake.

NEW YORK (CNNMoney.com) — For more than a century, the U.S. auto industry has been at the center of the American industrial economy. Events over the next month could determine if that remains the case.

This week, Congress will consider whether to cough up billions of dollars to bail out the troubled companies.

There are loud advocates with strong arguments on both sides.

Chrysler leaders get millions

November 16, 2008 by Infinite

Unsold Chrysler products sit at a dealership in Dormont, Pa.

As Detroit’s crumbling auto industry asks Congress for a bailout, Chrysler is in the awkward position of paying about $30 million in retention bonuses to keep top executives while the company cuts thousands of jobs.

Chrysler owes the bonuses under its contracts with about 50 executives, based on a retention incentive plan crafted early last year by former German parent DaimlerChrysler, when it was preparing to sell the Chrysler unit.

Related article: Daimler: Chrysler worth nothing

Nancy Rae, Chrysler executive vice president for human resources and communications, said the move made sense at the time to ensure potential buyers that key Chrysler executives would remain in place after a sale. She acknowledged that the bonuses could be seen as controversial now.

GM Collapse at $200 Billion Would Exceed Bailout Tab, Firm Says

November 15, 2008 by Infinite

Nov. 15 (Bloomberg) — General Motors Corp., burning through cash as sales slump, would cost the government as much as $200 billion should the biggest U.S. automaker be forced to liquidate, a forecasting firm estimated.

A GM collapse would mean “more aid to specific states like Michigan, Ohio, and Indiana, and more money into unemployment and extended benefits,” Nariman Behravesh, chief economist at IHS Global Insight Inc. in Lexington, Massachusetts, said yesterday in an interview.

Behravesh’s projection of $100 billion to $200 billion in costs dwarfs the $25 billion industry bailout plan that will be debated in Congress next week to prop up Detroit-based GM, Ford Motor Co. and Chrysler LLC. The drain on taxpayers from a rescue or a GM failure is a central issue for U.S. lawmakers.

Included in the Global Insight estimate, which Behravesh supplied to Bloomberg News, are the anticipated costs for existing programs, such as unemployment insurance, and new measures that the economist said would be needed to revive economic growth after millions of auto-related job losses.

A GM shutdown would wipe out jobs among suppliers as well as at the automaker itself, pushing the U.S. unemployment rate next year to 9.5 percent, compared with current projections of as high as 8.5 percent, Behravesh said.

GM Judged Too Big to Fail as Pelosi Embraces Rescue

November 12, 2008 by Infinite

Vehicles are parked at the Jefferson Chevrolet dealership in Detroit on Nov. 7, 2008. Photographer: Jeff Kowalsky/Bloomberg News

Nov. 12 (Bloomberg) — House Speaker Nancy Pelosi has thrown her support behind the premise that General Motors Corp., the largest U.S. automaker, is too big to be allowed to fail.

In urging Congress to enact emergency aid for the ailing auto industry, Pelosi rejected calls to let GM collapse and sided with the company and its allies in trying to prevent a “devastating” domino effect that would cost millions of jobs.

“Trying to reorganize the auto industry in bankruptcy would be as close to reorganizing the whole U.S. economy as you could get,” said Alan Gover, a bankruptcy lawyer with White & Case LLP in New York. “The vast supply chain involves thousands of businesses, millions of existing jobs and just as many retirees, as well as whole communities and states.”

Passage of an industry bailout plan may keep GM from running out of operating cash by year’s end, which it says may happen without U.S. help. GM is the second-biggest provider of private health-care benefits and was the third-biggest advertiser in this year’s first half.

“It’s truly one of those companies that’s too big to fail, and everybody understands that,” said Nariman Behravesh, chief economist at IHS Global Insight Inc. in Lexington, Massachusetts. “If it does collapse, it could make the recession deeper and longer.”

Behravesh said a GM bankruptcy could send the U.S. jobless rate as high as 9.5 percent, up from a 14-year high of 6.5 percent in October, and produce a recession comparable in length to that of 1980-82.

Ford Has $2.98 Billion Operating Loss as Sales Plunge

November 7, 2008 by Infinite

Nov. 7 (Bloomberg) — Ford Motor Co., with U.S. sales shredded by the worst financial crisis since the Great Depression, posted a third-quarter operating loss of $2.98 billion and said it used up $7.7 billion in cash.

The per-share operating loss of $1.31 was wider than the 93-cent average of 10 analyst estimates compiled by Bloomberg. Ford said it would trim more salaried jobs by January, deepen its fourth-quarter production cuts and shrink capital spending by as much as 17 percent.

Revenue plunged 22 percent to $32.1 billion, forcing Ford to triple its consumption of cash compared with the second quarter. Cash, cash equivalents and marketable securities for Ford’s automotive business plummeted 29 percent to $18.9 billion on Sept. 30, the Dearborn, Michigan-based company said today.

“Cash burn is the No. 1 issue,” Rebecca Lindland, an IHS Global Insight Inc. analyst, said in a Bloomberg Television interview. “We associate cash burn with General Motors. It has not always been a problem with Ford. That is potentially a new problem.”

GM Says It May Not Have Enough Cash to Operate This Year

November 7, 2008 by Infinite

Nov. 7 (Bloomberg) — General Motors Corp., seeking federal aid to avoid collapse, said it used $6.9 billion in cash in the third quarter and may fall below the minimum it needs to operate before the end of this year.

GM said it will be near its minimum threshold for operating cash for the remainder of 2008 and will be “significantly short” of that level by the end of June without an improvement in market conditions, a major asset sale or access to new loans or cash support. GM has said it needs at least $11 billion in cash to pay its bills each month.

“GM is making a pretty direct plea for help,” said Pete Hastings, a fixed-income analyst at Morgan Keegan Inc. in Memphis, Tennessee. “The message is, `we’ve done all the things we can do, and we need help.’ And if we don’t get help, fill in the blank.”

US motor industry: The great breakdown

October 30, 2008 by Infinite

Such is the severity of the downturn in the global car industry that US manufacturers are now pushing for their own state bailout.

Why stop at the banks? Now governments around the world are pouring taxpayer money in to bail out loss-making financial institutions, it is getting harder to argue against subsidies, loans, guarantees and other forms of government assistance for other industries, too – particularly since the economic pain is now being felt far from Wall Street.

Which is why Rick Wagoner, chief executive of General Motors, the largest US carmaker, packed his suitcase for Washington and headed to the capital again this week. He is leading a lobbying push aimed at tapping taxpayers and staving off the bankruptcy of the loss-making company. GM’s coffers are being depleted at a rate of $1bn a month, and will run dry by the end of next summer. Little wonder its shares have touched levels not seen since it emerged from the Great Depression.

GM – owner of the Vauxhall brand and Chevrolet, amongst others – is in the throes of merger talks with its smaller rival Chrysler, which is also haemorrhaging cash. The hope is a merger will save money, allowing them to close more factories and cut more jobs. The trouble is, things are so desperate they don’t have the cash to write the redundancy cheques. They are asking for up to $10bn in low-cost loans to tide them over.

So here we are, on the brink of Bail-out II: Detroit.

Volkswagen shares soar again, up 93 percent

October 28, 2008 by Infinite

FRANKFURT, Germany

Shares of Volkswagen AG jumped an eye-popping 93 percent on Tuesday after a similar surge the day before. Speculation on the reason centered on hedge funds needing to unwind bad bets on the share’s direction.

The immediate rise in VW share value — at one point, its market capitalization made it more valuable than Exxon Corp. — prompted German regulators to declare they were looking into the reasons for the explosive growth.

The surge came amid reports that hedge funds had been forced to buy scarce shares at high prices after mistakenly betting the shares would fall.

But with Porsche now holding nearly 43 percent of the company, and options to reach 75 percent by next year, that left a shortage of shares. If investors had shorted the stock by selling borrowed shares, they would need to buy shares in order to complete the deal.

On Sunday, Porsche Automobile Holding SE, which owns the company that makes the 911, Cayenne and upcoming Panamera sedan, said it increased its stake in VW to nearly 43 percent plus options, with an eye toward 50 percent by the end of 2008.

That started pushing VW shares into the stratosphere. On Monday, they were up nearly 147 percent to close at 520 euros ($651.35) compared with Friday’s closing price of 210.85 euros ($264.41).

On Tuesday, Wolfsburg-based Volkswagen’s shares spiked as high as 1,005 euros ($1,256) in Frankfurt trading Tuesday, nearly doubling Monday’s close. At that level, Volkswagen was worth some 296 billion euros ($370.8 billion), greater than Exxon’s market cap of $343 billion.

They later settled back to close at 945 euros ($1,183.70) — a gain of 81.7 percent. Some 12.3 million shares traded hands Tuesday.

Kerkorian Cuts Ford Stake, May Exit as $1 Billion Bet Collapses

October 21, 2008 by Infinite

Oct. 21 (Bloomberg) — Billionaire Kirk Kerkorian may sell his Ford Motor Co. stake after the $1 billion holding lost two- thirds of its value and put his firm’s casino investments at risk.

Kerkorian’s Tracinda Corp. sold 7.3 million Ford shares yesterday for an average of $2.43 each and said it contacted an investment bank about unloading the rest. Tracinda’s remaining 133.5 million shares were valued at $311.1 million based on yesterday’s closing price.

Kerkorian, 91, acted five days after Ford’s collapsing stock price forced him to pledge another 50 million shares of his MGM Mirage casino company to support the $600 million credit line used to buy stock in the second-largest U.S. automaker. Tracinda paid as much as $8.50.

GM Lacks Investors to Fund Deal With Chrysler

October 20, 2008 by Infinite

[general motors headquarters]
The General Motors Corporation world headquarters.

General Motors Corp.’s hopes of buying longtime rival Chrysler LLC are floundering because the auto maker remains unable to secure the financing necessary for the deal, say people familiar with the matter.

In recent days GM, its lenders, and Chrysler owner Cerberus Capital Management, have been trying to woo investors with a pitch about the transaction. That pitch touts a combined GM-Chrysler as delivering cost savings of up to $10 billion, an immediate boost in revenue and an increase in cash available to the merged firm. Outside money is needed to fund the cost-cutting — especially buyouts and severance packages for tens of thousands of hourly and salaried employees. Those cuts could total as much as 40,000 jobs if a deal comes together, said people briefed on the talks. And GM is already burning more than $1 billion in cash each month.

The United Auto Workers union has publicly questioned the deal but privately is studying its merits. GM is pitching the combination as a way to better ensure the continued funding of hundreds of thousands of UAW retiree pensions and health-care benefits. A new company would produce upward of $250 billion in annual revenue, while owning more than 30% of the U.S. market. It would also house an estimated $30 billion in cash, thus improving the company’s credit rating and lowering the risk that either GM or Chrysler would have to seek bankruptcy protection over the next 15 months.

But several of the potential lenders remain unconvinced. Credit markets remain extremely tight, and a number of lenders are fearful of the complexity and scale of combining two industrial giants amid an economic downturn. If investors continue to shun the deal, its proponents could take their case to the U.S. government, arguing that a merger is vital to the survival of the nation’s domestic auto industry. It is unclear at this point what role, if any, Washington might be willing to play. But GM, Cerberus and its banks aren’t ruling out selling a stake in the new company to the federal government.

Germany’s Car Industry Crashes

October 12, 2008 by Infinite

For years, Germany Inc.’s best promotional vehicles have been the world-class luxury cars the country produces. Shiny Audi, BMW and Mercedes-Benz cars are like mobile billboards for excellence, from New York to Moscow, Buenos Aires to Shanghai.

But as the global financial crisis begins to take its toll on the real economy, Germany’s export machine has hit a wall. German exports fell 2.5% in August, the sharpest fall since 2003, as consumers and companies around the world cancel orders for everything from high-end industrial equipment to chemicals.

The car industry, still Germany’s biggest employer, is the worst hit. High gas prices in key markets such as the U.S. have slowed sales for months. Some consumers have been waiting for more fuel-efficient models, while many more are now delaying new purchases because of uncertainty over their jobs. Thanks to the credit crunch, even people who want to buy are finding finance has dried up.

All that spells trouble for the likes of BMW, Mercedes Benz, Porsche, Volkswagen, Ford Europe and General Motors’ Europe arm, Opel. Ferdinand Dudenhoffer, a respected industry analyst, predicts that the number of new German cars delivered to customers in 2008 will fall by at least 100,000 units to around 3.1 million, and will likely slip below three million next year. As a result, he says, German car companies will have to cut up to 20,000 jobs over the coming year.

Read moreGermany’s Car Industry Crashes

Japanese Invent Car That Runs On Water

June 15, 2008 by Infinite

Source: Nikkei Business Publications

Genepax Co Ltd explained the technologies used in its new fuel cell system “Water Energy System (WES),” which uses water as a fuel and does not emit CO2.

The system can generate power just by supplying water and air to the fuel and air electrodes, respectively, the company said at the press conference, which took place June 12, 2008, at the Osaka Assembly Hall.

The basic power generation mechanism of the new system is similar to that of a normal fuel cell, which uses hydrogen as a fuel. According to Genepax, the main feature of the new system is that it uses the company’s membrane electrode assembly (MEA), which contains a material capable of breaking down water into hydrogen and oxygen through a chemical reaction.

Though the company did not reveal the details, it “succeeded in adopting a well-known process to produce hydrogen from water to the MEA,” said Hirasawa Kiyoshi, the company’s president. This process is allegedly similar to the mechanism that produces hydrogen by a reaction of metal hydride and water. But compared with the existing method, the new process is expected to produce hydrogen from water for longer time, the company said.

With the new process, the cell needs only water and air, eliminating the need for a hydrogen reformer and high-pressure hydrogen tank. Moreover, the MEA requires no special catalysts, and the required amount of rare metals such as platinum is almost the same as that of existing systems, Genepax said.

Unlike the direct methanol fuel cell (DMFC), which uses methanol as a fuel, the new system does not emit CO2. In addition, it is expected to have a longer life because catalyst degradation (poisoning) caused by CO does not occur on the fuel electrode side. As it has only been slightly more than a year since the company completed the prototype, it plans to collect more data on the product life.

At the conference, Genepax unveiled a fuel cell stack with a rated output of 120W and a fuel cell system with a rated output of 300W. In the demonstration, the 120W fuel cell stack was first supplied with water by using a dry-cell battery operated pump. After power was generated, it was operated as a passive system with the pump turned off.

This time, the voltage of the fuel cell stack was 25-30V. Because the stack is composed of 40 cells connected in series, it is expected that the output per cell is 3W or higher, the voltage is about 0.5-0.7V, and the current is about 6-7A. The power density is likely to be not less than 30mW/cm2 because the reaction area of the cell is 10 x 10 cm.

Meanwhile, the 300W fuel cell system is an active system, which supplies water and air with a pump. In the demonstration, Genepax powered the TV and the lighting equipment with a lead-acid battery charged by using the system. In addition, the 300W system was mounted in the luggage room of a compact electric vehicle “Reva” manufactured by Takeoka Mini Car Products Co Ltd, and the vehicle was actually driven by the system.

Genepax initially planned to develop a 500W system, but failed to procure the materials for MEA in time and ended up in making a 300W system.

For the future, the company intends to provide 1kw-class generation systems for use in electric vehicles and houses. Instead of driving electric vehicles with this system alone, the company expects to use it as a generator to charge the secondary battery used in electric vehicles.

Although the production cost is currently about ¥2,000,000 (US$18,522), it can be reduced to ¥500,000 or lower if Genepax succeeds in mass production. The company believes that its fuel cell system can compete with residential solar cell systems if the cost can be reduced to this level.

More:

Reuters: Petrol Pricey? Japanese Invent Car That Runs On Water

Genepax (Japanese)

Genepax (English)

Source: BlackListedNews

Man Builds Electric Car for $4750, Costs $7 For Every 300 Miles

October 15, 2011May 21, 2008 by Infinite

Also here the article (and the video) have been removed.

I have only found a bad but watchable replacement for the video.

YouTube

Source: NBC5

With gas pushing $4 per gallon, many people are looking for ways to save some green at the pump. One North Texas man found a way to help the environment and commute to work for just pennies a day.

David Murray may drive the quietest car in North Texas, powered only by a small electric motor, and not creating any emissions.

“The most common question I get is, ‘Is this an electric car?’ and then they’re like, “Is it a hybrid?’ Nope, it’s a real electric (car),” Murray said.

When his car is low on fuel, Murray simply plugs the power cord into the nearest outlet.

“Yeah, just plug it in here. Just a regular old extension cord,” Murray said.

The self-described computer geek from Kennedale bought the 1993 Eagle Talon from a junkyard for just $750.

“First thing I did when I got the car home was pull the engine out,” Murray said.

He then spent about $4,000 more to convert the gas-guzzler to run on electricity alone, doing all the work himself in his garage at home.

“I bought the electric motor and I was like well, I gotta figure out a way to couple it together with the original transmission,” he said.

The car can hit 55 mph, driving right past the high prices at gas stations.

“I hear people complain about them at work all the time. I just grin,” he said.

Murray spends just $7 per month on electricity to charge the batteries — enough to go about 300 miles.

“I don’t even look at the gas prices,” Murray said.

World’s First Air-Powered Car: Zero Emissions by Next Summer

November 13, 2008March 22, 2008 by Infinite

This six-seater tax, which should be available in India next year, is powered entirely by a tank filled with compressed air.

India’s largest automaker is set to start producing the world’s first commercial air-powered vehicle. The Air Car, developed by ex-Formula One engineer Guy Nègre for Luxembourg-based MDI, uses compressed air, as opposed to the gas-and-oxygen explosions of internal-combustion models, to push its engine’s pistons. Some 6000 zero-emissions Air Cars are scheduled to hit Indian streets in August of 2008.

Barring any last-minute design changes on the way to production, the Air Car should be surprisingly practical. The $12,700 CityCAT, one of a handful of planned Air Car models, can hit 68 mph and has a range of 125 miles. It will take only a few minutes for the CityCAT to refuel at gas stations equipped with custom air compressor units; MDI says it should cost around $2 to fill the car’s carbon-fiber tanks with 340 liters of air at 4350 psi. Drivers also will be able to plug into the electrical grid and use the car’s built-in compressor to refill the tanks in about 4 hours.

Of course, the Air Car will likely never hit American shores, especially considering its all-glue construction. But that doesn’t mean the major automakers can write it off as a bizarre Indian experiment – MDI has signed deals to bring its design to 12 more countries, including Germany, Israel and South Africa.

By Matt Sullivan
Published in the June 2007 issue.

Source: popularmechanics.com