1st Gear: Pressure Mounts On GM To Dump Opel
The Detroit Free Press reports that Morgan Stanley analysts say it's time for General Motors to divest itself of money-bleeding Opel. The dictate came in a research report from lead analyst Adam Jonas, who has a reputation for speaking his mind about GM. (I said something similar in Forbes in January.) It was Jonas who reminded everyone this summer that GM has floated billions of dollars in loans to Opel over the past couple of years. GM spokesman Jim Cain said the company has no intention of doing any such thing. "We are committed to Opel and believe we can restore it to long-term profitability," he said in an email to the Freep.
Breaking off Opel "reflects a significant deterioration in the European car market and widening operating losses," the analysts said in a research report. They believe it will cost the company between $7 billion and $13 billion to get rid of Opel, but GM has $33 billion in cash on hand. GM came close to selling Opel in 2009, but pulled back when a number of executives decided it was better to try to fix Opel than get rid of it. Since 1999, Opel has lost $17 billion, and there are no significant details yet of the latest turnaround plan. Does it matter if Morgan Stanley recommends dumping Opel? Well, one brokerage firm may not matter, but others are likely to jump on the jettison Opel train.
2nd Gear: Vauxhall Drops Its Top... At 30 MPH
But GM's European operations aren't going away just yet. Yesterday, Vauxhall, its British brand, gave a teaser look at the new Cascada, which some analysts think might possibly become a Buick convertible (other analysts have humorous guesses about the name). Cascada is the first mid-sized convertible built and designed by Vauxhall in more than 70 years. It's a bit longer than the Audi A5 convertible, with a full-sized fabric roof that can be opened or closed with the touch of a button, even when the car is traveling at up to 30 mph. Cascada won't be on display at Paris, because Opel wants the spotlight to be on the Adam, but Vauxhall says it will be introduced in early 2013.
3rd Gear: Bloomingdale's And BMW Go For A Ride
The New York Times brings word of the latest retailer-car company partnership, although it actually involves a motorcycle. A $15,675 BMW R1200R Classic is the centerpiece of the men's fall fashion push for the big department store. The Times says the BMW was chosen "as a rugged accessory to bolster sales of a collection of jeans, leather jackets and other items cast in manly shades of black." The bike appears in catalogs, print advertising and 30 pop-up shops within Bloomingdale's stores. For two weeks last month, six of the bikes graced windows of the flagship store in Manhattan. (Of course, nobody fashionable saw them, because everyone was on Fire Island or in the Hamptons.)
"It started as we were looking at the fall merchandise, and we knew that leather was going to be huge," David Ender, a marketing executive for Bloomingdale's, said in a telephone interview with the paper. Store executives went to last January's International Motorcycle Show, where they connected with officials from BMW Motorrad. The R1200R Classic, with BMW's signature boxer-engine layout, spoke wheels, black tank and white racing stripe, fit the bill. "They said, ‘Stop there, this is it,'" BMW Motorrad spokesman James Callahan said. One customer left the Tyson's Corner, Va., Bloomingdale's and went straight to a BMW dealer, where the customer bought a bike. (No word if they also bought a leather jacket.)
4th Gear: The South Has Risen Again
Over at Gadling, my series, The Southern Road, has been running all this week, and continues next week. It's the result of a 4,000 mile, two-week road trip I took in August, from Greenville, S.C., across to Tupelo, Miss. I went to nine foreign-owned car plants over 10 days, which means I've now been to 99 plants. (Insert your Jay-Z joke here.) I also went to visit the site of the new Airbus factory down in Mobile, which is exactly 974 miles south of Ann Arbor. Here's what struck me. It's a lot different to get in your car and drive from plant to plant than it is to fly down from Detroit and visit one of two. When you're on the road, you get a much clearer picture of what these plants mean to the Southern economy. And the impact is pretty incredible.
Every one of the plants I visited — BMW, VW, Hyundai, Kia, Mercedes, Honda, Nissan, and the Toyota plants near Tupelo and Huntville, Alabama — has added jobs since it opened. Every one of the plants has meant something new to its community — roads, bridges, schools, city halls, parks, hotels, restaurants, the list just goes on and on. What's happened is that the South has basically recreated what Henry Ford and Alfred Sloan and all the other Detroit moguls originally created. It's spread out across a bunch of states, just as they originally did. By doing so, these companies pretty much guarantee that Detroit can never own the South again. Of course, people will buy GM and Ford pickups, because they need them for work, but they also buy cars from the company that put a factory in their state or their town, just as people in the Midwest did for years.
So, with the conventions behind us and the presidential election ahead, just remember that Detroit isn't the entire American auto industry. I just saw the other piece. And it's an entirely different game.
Reverse: An Electric Car Wins The First Auto Race
On this day in 1896, an electric car built by the Riker Electric Motor Company won what some consider to be the first auto race in America, around a horse track in Cranston, Rhode Island. There were seven cars in the race, attended by 60,000 people, and the Riker won easily, finishing five laps in 15 minutes. The race reportedly is the origination of the phrase: "get a horse!" [History]
In keeping with our new discussion system, here's a place for you to own the floor. We're asking each day what you think about an issue that comes up in TMS.
Today, what would you think of a convertible for Buick? Is there something else you'd like to see for the brand, or has its time passed? Remember there's no right answer or wrong answer. It's Neutral.
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