GM Pays No Federal Income Tax, Jeep Wrangler Sales Boom, And BMW, Hyundai May Make Sweet Engine Love
This is the Morning Shift, our one-stop daily roundup of all the auto news that's actually important — all in one place at 9:00 AM. Or, you could spend all day waiting for other sites to parcel it out to you one story at a time. Isn't your time more important?
You'll notice there's only four gears this morning. That's because there ain't a damn bit o' news out there today. Come on guys, make something up — anything!
1st Gear: Thanks, America! GM Pays No Federal Income Tax
General Motors, which, thanks to some help from the U.S. taxpayer, has earned more than $13 billion since 2009, said Thursday its worldwide tax rate will increase to as much as 13%. But, as David Shepardson at the Detroit News points out, the Detroit automaker, which reported $1 billion in profits for the first three months of the year, has legally avoided paying U.S. federal income taxes since exiting bankruptcy. And GM likely will pay no income taxes for many more years to come thanks to a series of Treasury Department rulings on TARP dollars from 2008 letting GM use $18 billion in losses – from the "old GM" that was left behind in bankruptcy – to offset any profits. GM spokesman Jim Cain told Shepardson that the automaker pays "significant" state income taxes, but "we did not pay federal income tax last year," he said.
2nd Gear: GM Profits Slide, But Still Up
But it's not all just a ride on the tax-free gravy train for General Motors as first-quarter profit slid 61% on widening losses in Europe. Net income declined to $1.32 billion from $3.37 billion a year earlier. Excluding some items, profit slipped to 93 cents a share, down from 95 cents a year earlier. That beat the 85-cent average estimate in a Bloombergsurvey of 16 analysts. The adjusted operating loss in Europe, including Opel, totaled $256 million compared with a $5 million profit a year earlier, GM said. Not included in the loss is $590 million in writedowns, according to the company. GM said fixing Europe will require a series of efforts and may not come all at once. GM shares fell to the lowest intraday price in almost four months.
3rd Gear: Jeep Wrangler Sales Boom, Production Lines To Roll Through Fourth of July Holiday
The Toledo Blade reports that Chrysler will keep the Jeep Wrangler production line moving all summer long as it labors to meet demand for the popular Toledo-built sport utility vehicle. This year through April, Jeep sold nearly 42,000 Wranglers in the United States, up 31% from 2011. Wrangler is the second-best-selling Jeep model behind the Grand Cherokee and Chrysler Group's fifth-best-selling vehicle overall, trailing the Ram pickup, Grand Cherokee, Dodge Caravan, and Chrysler 200. Sales outside the United States have been brisk as well. To keep up with that demand, Chrysler will not shut down the plant for the traditional two-week maintenance and update period that usually falls around the July 4 holiday. We can't think of anything that says 'murica like building Wranglers over the holiday!
4th Gear: BMW, Hyundai In Joint Engine Development Talks
German carmaker BMW and South Korean automaker Hyundai are discussing a possible tie-up in engine development and other areas, according to a Reuters source. "The talks are at early stages," the source said on condition of anonymity because the talks were confidential. A second source told Reuters the two companies had discussed a comprehensive alliance, including jointly developing an engine and sharing development costs equally. He said he had no knowledge of whether the talks were still under way. Makes sense to share costs on development of small, fuel-efficient engines because the profit margins are so, you know, similarly-sized.
Reverse:
A Weight Hobbling G.M. [New York Times]
Ford's lessons for Europe. [Washington Post]
Hyundai joins makers with brake override on all models. [USA Today]
Chrysler Minivan No. 1 for 29 Years Profits Marchionne. [Bloomberg]
Justin Bieber's 'Boyfriend' Video All About 'Cars, Girls'. [MTV]
Detroit Big Three Profits Surge While Shares Decline. [Bloomberg]
Jaguar Land Rover said to invest in UK plant. [Automotive News]
Today in Automotive History
On this day in 1984, New Jersey rocker Bruce Springsteen releases "Pink Cadillac" as a B-side to "Dancing in the Dark," which will become the first and biggest hit single off "Born in the U.S.A.," the best-selling album of his career. [History]
Show us your tips!
Got tips for our editors? Want to anonymously dish some dirt on a competitor? Know something about a secret car? Email us at tips@jalopnik.com.
Lost in our new layout?
Click here for the Opposite Lock or Tips forums. Want a more "blog-like" look? Click the button up top next to "Top Stories."