Driving the Nation

Wolfgang Hatz talks about VW & Audi Electric vehicles

Lou Ann Hammond — Mon, 30 Aug 2010 00:17:50 +0000

I met up with Wolfgang Hatz, Vice President of Powertrains for Volkswagen AG in San Francisco, CA.

We talked about gasoline and diesel engines and what the plans are for the future of both.

What about hybrids?

We know about the Audi E-tron, what other electric vehicles are coming to market.

What about the E-up, E-Golf and E-Jetta, when will they come out?

Efficient Drivetrain (EDI) at the 2010 Plug-in conference

Lou Ann Hammond — Sun, 29 Aug 2010 23:53:22 +0000

Joerg Ferchau, CEO of EDI talked to us at the 2010 Plug-in conference in San Jose, CA.

EDI makes transmissions more efficient with better power to weight ratio.

How do they do this?

Most car companies don’t have CVT with battery electric vehicles, so EDI is looking for customers.

How much better mileage will you get with this technology?

2011 Nissan Leaf details at the 2010 plug-in conference

Lou Ann Hammond — Sun, 29 Aug 2010 23:30:36 +0000

Mark Perry, Nissan’s North American director of EV and Advanced Technology, was at the 2010 Plug-in conference in San Jose, CA.

We asked Perry why Nissan decided on a 100 mile range.

How long does it take to fully charge a Nissan Leaf using a

110 (level 1 charger?

a level 2 charger?

What is a fast charger? What states are they going in? How long will it take to fully charge a car with a DC fastcharger?

How hard is it to work with utility companies and public/private partnerships for electric vehicles versus selling an internal combustion engine?

What else can the Department of Energy (DOE) sill do?

When does Nissan consider the Leaf mainstream?

Is Infrastructure still a problem?

Mark Perry on the 2011 Nissan Leaf plugin electric vehicle

Lou Ann Hammond — Sun, 29 Aug 2010 23:14:17 +0000

Mark Perry, Nissan’s North American director of EV and Advanced Technology, was at the 2010 Plug-in conference in San Jose, CA. We asked Perry why there were no vents for cooling the battery for the Nissan Leaf. What type of battery is it? Perry shows us the battery and how it is situated in the car. Why does this battery have 48 modules and 4 packs?

Killing the Mercury brand, buying GM stock, or Ford, on the John Batchelor radio show

Lou Ann Hammond — Sun, 29 Aug 2010 22:00:00 +0000

71-year old Mercury is being killed off. Why?

Oldsmobile cost General Motors about a billion dollars to close. How much will it cost Ford to close Mercury?

These are questions that need to be answered when you are allowed a certain amount of money in stock and you have to decide if you want to diversify some of your Ford stock into the new General Motors IPO.

Ford vs. General Motors

If you were allowed to only hold so much stock in automotive holdings would you buy Ford Motor Company (F: NYSE $11.77) or a stock that is about to come out with General Motors?

Ford Motor Company will not die because of their stock price. However, if General Motors has a bad IPO and a bad third quarter General Motors could be in for a rough ride.

Ford

Ford has $27.3 billion in automotive debt.

Revenue: 131.7B

Ford has two brands:

Ford (up 27% in sales as of 7/2010)

Lincoln (up 4.1% in sales as of 7/2010) is promising seven new or significantly improved Lincolns in the next four years

Ford will be closing down Mercury at an unknown cost to Ford.

dumped by Ford:

Aston martin

Jaguar

Land Rover

Volvo

General Motors

GM has only $8.1 billion after shedding much of its debt in a bankruptcy reorganization last year.

$2.2 billion in the first half of 2010

GM got a $50 billion bailout, of which $43.3 billion still needs to be repaid.

The Government owns 304 million shares of General Motors stock.

General Motors has four brands:

GMC

Cadillac

Chevy

Buick

General Motors has closed all the brands it intends to close.

Eliminating the government stake, and word, in “Government Motors” is critical for General Motors and the Obama administration.

dumped by GM:

Pontiac, Saturn, Saab and Hummer

You got to know when to hold ‘em, know when to fold ‘em

So GM’s Ed Whitacre is leaving after two quarters of profitability, but before an IPO comes out. In the conference call today Whitacre said, “My public duty was to return this company to greatness, and I didn’t want to stay a day beyond that.”

General Motor’s conference call was full of surprises today when they announced the quarterly numbers. Even more surprising was that Ed Whitacre was going to step down as CEO effective September 1, 2010 and step down as Chairman of the Board and a board of director effective December 31, 2010.

First the numbers

Droll as they might be, compared to the rest of the news, the numbers are good.

$33.2 Billion

General Motors Revenue for the 2nd quarter.

$1.54 Billion

General Motors profit for the second quarter. This number is earnings before taxes (EBIT), so look for the next number, which is

$1.3 Billion

While profit is good, net income is better. General Motors posted the best net income they’ve had since 2004. This number parlays out to $2.55 earnings per share.

$100 million

The difference in loss between the first quarter and second quarter for GM Europe. GM Europe had a loss $200 million in the second quarter, an improvement of $300 million from the first quarter.

Unfortunately, GM International Operations earned $700 million in the second quarter, down from $1.2 billion in the first quarter.

$2.8 billion in free money!

Oh, alright maybe it was $2.8 billion in free cash flow. Not really free money, but all money is good and spent with equal glee. GM closed the second quarter with $32.5 billion in cash and marketable securities.

Does General Motors still have challenges that need to be resolved?

According to an article written by Michelle Krebs for Edmunds.com, using Edmunds.com data, General Motors has met some challenges, still has a way to go to be at U.S. industry standards.

- Today most GM vehicles sell for an average of 15.7 percent off sticker price; the industry average is 13.7 percent. During first quarter, GM’s discount was 13.9 percent and the industry’s was 13.2 percent. In second quarter of last year, GM’s discount was 16.6 percent and the industry’s was 15.5 percent.

- GM dealer inventory is at 47 days to turn, down from 53 in first quarter and from 117 in the second quarter of last year, demonstrating GM, indeed, has skillfully maintained discipline in matching supply to demand.

- GM’s True Cost of Incentives (TCI), Edmunds’ proprietary calculation of incentives, for second quarter is $3,691 per vehicle sold; the industry average is $2,672. GM’s incentives have climbed an average of nearly $400 per vehicle since first quarter of this year while the industry average rose only $66 per vehicle sold. This time last year, GM incentives averaged $776 higher than industry average; currently GM averages $1,018 higher.

- Of all new GM financing deals, 14.8 percent are leases; this is the highest lease penetration rate for GM since July 2008.

Why is Whitacre leaving?

No one knows why he is leaving before an IPO is out. They can conjecture that Dan Akerson might be better for the IPO job and has had more experience as a CEO, but this was not said.

As I talked to people inside General Motors over the last year they have all said the same thing. Whitacre talks to people, he shows up unannounced and talks to the guy on the line. He talks to people inside General Motors that he thinks will tell him what needs to be changed.

Whitacre has acclaimed himself as a non-car guy. He has to listen to people working inside General Motors in order to find out what needs to be done. But he does that. He makes the changes, changes the people, changes the “frozen middle” of a hundred year old company that knew it had to be changed, but was still risk averse.

In a briefing with analysts and media Whitacre said, “We’ve positioned the company for success and things look good. There’s a foundation in place, a good foundation. I see no reason to delay.”

The fairly consistent part of Whitacre’s regime was change. As one GMer put it, “if things weren’t changing, one started feeling nervous”.

Is Akerson the right person for the job?

In an Associated Press interview Bob Lutz, a former vice chairman of GM who retired earlier this year, said in an e-mail that Akerson doesn’t need auto experience to run GM because it has a solid management team of industry experts. But he does need to listen to that team, Lutz said

“He’s (Akerson) very strong, very opinionated, not always right, and needs to work on listening skills,” Lutz said. “If he can bring himself to trust his now-outstanding senior executive group and lead rather than direct, I think he’ll do an outstanding job.”

Whitacre, Lutz said, had no industry experience but focused the company on designing and building world-class cars and trucks.

When you think of a board of director you think any one of those people should be able to step in and be CEO of the company they are a board of director for. Dan Akerson’s been a Board of Director since July, 2009.

According to Akerson’s bio he appears to be the right person to take the company public. The government owns 61 percent of General Motors, and an IPO is supposed to pay the Government back.

The question is, will he be another interim CEO, or an ongoing concern CEO? Akerson, 61, will be GM’s fourth CEO in 18 months.

Think about that. Think about how frazzled you would be if every 4 months you had a new boss. A new boss that was brought in the with express intent of thawing out and thinning out the old regime.

According to Carlyle’s website, Akerson’s bio is a plethora of CEO and Chairman jobs sprinkled in with some Board of Director

Akerson has been Chairman, Chief Executive Officer or President of several major companies, including General Instrument, MCI, Nextel and XO Communications.

Akerson is a member of the Board of Directors of the American Express Company, Booz Allen Hamilton, Freescale Semiconductor and General Motors Company.

Will Akerson need to step down as board of director for these other companies when he becomes CEO of General Motors?

Gordon Chang, Forbes and John Batchelor radio show on Volvo/Geely

Lou Ann Hammond — Sat, 21 Aug 2010 21:56:00 +0000

Gordon Chang, Forbes and John Batchelor of the John Batchelor radio show talk about Geely’s volvo.

Does it matter that Volvos will be made in China?

Mercedes-Benz is made in China and exported to Europe. That has not hurt Mercedes-Benz sales.

Volvo is using safety, but Geely will have to license those patents from Ford.

GM’s IPO:

This is the perfect Trifecta for General Motors to bring out an IPO.

Obama needs the auto company to look like the investment was good and the US will get their money back before the elections.

GM has had two good quarters. If the economy slows and auto sales slump GM might not look as good.

If other auto companies from China or India come in that will dilute the marketshare for GM.

Michael Sprague, Vice President, Marketing, KIA

Lou Ann Hammond — Sat, 21 Aug 2010 21:36:50 +0000

We’re in San Francisco, CA with Michael Sprague, Vice President of Marketing for Kia Motors.

Kia is bringing out the refreshed Sportage, which Sprague talks about.

He also talks about the truck and cars sales for July, 2010.

How many trucks and cars does Kia have? Why are truck sales better than car sales for Kia?

Is Kia going out of business?

Walter Sacki on the Kia Sportage’s Magna Powertrain

Lou Ann Hammond — Sat, 21 Aug 2010 20:59:26 +0000

The Kia Sportage is utilizing the Magna Powertrain on its all-wheel drive Kia Sportage.

Here is Walter Sacki talking about the Magna Powertrain. The unit is on the rear axle drive and is known as dynamax.

The unit allows for better curve control and a sportier feel.

Watch the demo video as Walter Sacki talks about the powertrain

JC Pavone on designing the Volkswagen Jetta

Lou Ann Hammond — Sat, 21 Aug 2010 20:43:28 +0000

JC Pavone and Marco are twin brothers. They are both designers for Volkswagen.

Pavone talks about his childhood and what brought he and Marco to design for Volkswagen. When they were twelve-years old, living in Brazil, the Pavones sent a letter to head of Brazil of design. He responded with two sketches and kind words.

What did the designer say to JC Pavone when he saw him as a designer for Volkswagen?

Nancy Gioia, Ford, at the 2010 plug-conference

Lou Ann Hammond — Sat, 14 Aug 2010 22:59:15 +0000

Nancy Lee Gioia is Ford Motor Company’s director of Global Electrification.

What does Ford have coming out before 2012?

What is their definition of electrification?

The Transit connect, the focus electric, a plug-in electric based on the focus plus lots more hybrids.

Why not range extenders?

What percentage of total marketshare does electric vehicles have to be to be considered mainstream to Ford?