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Archives for April 2009

Chrysler Files for Bankruptcy

April 30, 2009 by Tom Williams 1 Comment

2009 Chrysler Sebring Sedan

The news today did not come as a total surprise-Chrysler filed for Chapter 11 Bankruptcy today. While listening to local news reports from various Chrysler dealerships today, the general feeling was relief-not panic, the emotion normally associated with this sort of news. The key here is that Chrysler (and GM, for that matter), were asked by the US government in advance to have bankruptcy plans in place, should it come to that. 

And on Wednesday night, it did “come to that.” Chrysler was working with its creditors on a debt-for-equity swap. Some of the banks refused to go along, and as a result Chrysler was left with no alternative but to file for bankruptcy. As quickly as Chrysler filed, a plan for a “new” Chrysler was introduced, with a detailed look at Fiat’s new role in the company.

First, let’s break down who owns Chrysler, as Cerberus has given up its 80% stake, and Daimler gave up its 20% stake.  The Voluntary Employee Beneficiary Association (VEBA, aka the UAW) owns 55%, while 10% is proportionally shared between the US and Canadian governments. Fiat owns 20% of Chrysler off the bat, plus an additional 15% as Fiat meets three pre-determined goals:

  • When Fiat brings a 40mpg vehicle platform to be built in the US.
  • When Fiat brings a fuel efficient engine family to be built in the US.
  • When Fiat provides Chrysler access to its global distribution network for export of North American built vehicles.

Finally, once all government-backed loans are repaid, Fiat can become a majority owner of Chrysler.

Obviously, there is a lot of work to be done, but what does this news mean right now? First, Chrysler Financial is being replaced by GMAC, who will provide loans and financing to dealers and consumers. Chrysler CEO Robert Nardelli announced he will step down once bankruptcy proceedings are over. Nardelli will then continue with Cerberus as an advisor. 

Chrysler said the company will continue normal operations, with the exception of production-no vehicles will be built while the company is operating under bankruptcy protection. Vehicle warranties will be honored, dealers will receive inventory, and suppliers will be paid. Finally, we are told this will be a very quick bankruptcy, lasting only 30-60 days. 

It seems like an unlikely marriage, Chrysler and Fiat, but I have high hopes. I had high hopes when Daimler and Chrysler became a so-called “merger of equals”. Instead of truly sharing technology, Daimler threw Chrysler nothing but obsolete scraps. But here, Fiat wants something, and that’s an easy in back to North America. Dealer network? Check. Suppliers, manufacturing facilities? Check. 

As quick as Chrysler’s bankruptcy is said to be, the changes to turn this sinking ship around will not happen overnight. Chrysler’s biggest liability are the holes in their vehicle lines, which are chiefly:

  • No small, desirable car. Caliber? No thanks.
  • A non-competitive mid-size car in the Sebring/Avenger
  • While crossovers are the rage, the Dodge Journey is a wallflower

Chrysler has promised updated versions of the Jeep Grand Cherokee and Chrysler 300/Dodge Charger, but those are a full model year away at least, for now. We could possibly see Dodge/Chrysler badged Fiats, but that could take up to two years to happen. Fiat could also bring back Alfa Romeo, but again, who knows when that could happen. For now, we just have to wait and see.

Realistically, bankruptcy could be the best thing that could have happened to Chrysler. Maybe that’s why some people were actually relieved at the news. Time will tell, but this begins a new chapter for Chrysler.

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2010 Lincoln MKZ: Modern Mature

April 30, 2009 by Gary Grant 3 Comments

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When I write a vehicle review I try to get into the same head space as the target buyer so I can make my viewpoint relevant to folks who are actually researching said vehicle. I have a hard time relating to the “older” demographic sometimes, as I refuse to think of myself as a forty something. This past week however was filled with adult stuff, so it was a really good week to spend with the revamped 2010 Lincoln MKZ which is most certainly targeted at folks who are a tad more mature than I. On the fun side of things, we finished up the week at Toronto’s grand old King Edward Hotel which was the perfect setting for a shiny new Lincoln.

Cadillac and Lincoln. Two grand old prestige brands that were the car of choice for the affluent senior buyer in days gone by. Somewhere along the way though, the stately buyer’s tastes have changed and the market for floaty behemoths has shrunk. Over the past decade & a half or so, Cadillac has been repositioned into a brand that 40 somethings (not to mention rappers from da ‘hood) aspire to own. During that time, the Lincoln line seems to have missed the boat on sporty appeal. If our short time with the 2010 MKZ are any indication, perhaps that tide has turned.
[Read more…]

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2010 Nissan Armada Offers Simpler Packaging, Better Value

April 28, 2009 by Tom Williams Leave a Comment

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Although we had quoted Autoblog last December that the Armada, Nissan’s full-size SUV’s days were numbered, Nissan is introducing the 2010 Armada. The most significant changes are new content and simplified packaging, offering buyers a better value than the outgoing 2009 Armada. Other changes include minor exterior/interior trim, new colors, and standard front seat side impact supplemental airbags on the SE 4×2.

All Armadas are equipped with a 5.6 liter V-8 with 317hp mated to a five-speed automatic. New pricing and trim levels are outlined below:

Armada SE: 4×2 ($37,210), 4×4 ($42,810)

Armada Titanium: 4×2 ($42,140), 4×4 ($44,940)

Features Nissan Intelligent Key, leather seating, RearView Monitor, Bluetooth, Bose audio, power folding third row seat and auto-leveling rear suspension. Nissan claims a Titanium costs over $2,500 less than a comparably equipped 2009 model.

Armada Platinum: 4×2 (49,390), 4×4 (52,190)

In addition to the Titanium’s features, add heated front seats and steering wheel, power lift gate, moonroof, DVD entertainment, Navigation with XM NavTraffic and a 9.3GB Music Box hard drive. Nissan claims a savings of over $1,100 over a comparable 2009 model.

The 2010 Armada will be available in mid-May.

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End of the Road for Pontiac

April 27, 2009 by Tom Williams 1 Comment

2009 Pontiac Solstice Coupe

It was a poorly kept secret in the days leading up to GM’s press release Monday morning at 9:00AM. Pontiac is officially on its way out, the General planning a phase out to be completed by the end of 2010. Ever since GM submitted its Viability Plan to the US Congress, asserting that there were four core brands-one of them not Pontiac-the Excitement division’s future was in doubt. In the months that followed, the only word from GM was that Pontiac would be some sort of “focused niche brand”. What the focus or niche was supposed to be was unclear. In the end, my guess is GM themselves couldn’t define a viable future for Pontiac that made much financial sense. 

It’s a sad day for Pontiac fans, or for anyone who appreciated the brand’s history and the more exciting cars that were built over the years. Pontiac is often credited for creating the muscle car in the 1960’s when an option for a big, high-horsepower V-8 was available for its otherwise sedate Tempest, thus creating the legendary GTO. 

But when GM fell, Pontiac fell right along with it. The end of the muscle car era, and the rise of the Malaise Era of the 1970’s has been well documented, characterized by strangled V-8 engines and indifferent build quality. But greater than that was Pontiac’s constant search for an identity over the past several years. For the past 35 years Pontiacs cost a little more than Chevy’s and featured slightly different styling. Most of the time Pontiac had few, or no unique cars to themselves. 
[Read more…]

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GM: Viability Update

April 27, 2009 by Tom Williams Leave a Comment

2009 Saturn Vue XR

Without a doubt the biggest news from GM today was that Pontiac would be phased out, but there are other points worth mentioning here. GM confirmed that the “resolution” of Saab, Saturn and Hummer will be decided by the end of 2009 at the latest. To recap, Saab has filed with the Swedish government to reorganize itself while it seeks investors. Saab’s intent is to function as an independent company. With Saturn, the brand and its dealer network is essentially for sale. It’s speculated an Indian or Chinese manufacturer could buy in to take advantage of a ready to go dealer network. If a buyer doesn’t materialize Saturn’s current cars will run out their life cycle. Hummer is still on the market, but again, if no buyer is found, we’re looking at another shutdown.

A constant criticism of GM, in addition to having too many brands, has been having too many dealers. In 2008, GM had a total of 6,246 active dealers. GM now proposes that they will have 3,605 dealers by the end of 2010-that’s 500 fewer dealers and a full four years sooner than initially planned. In speaking with The Garage founder Gary Grant on the subject, his position is that dealers who have invested in their brand with up to date showrooms and facilities stand a good chance of staying. I agree-GM will be looking very carefully on a town to town basis, and the dealer who looks like he’s a living relic from Kurt Russell’s “Used Cars” won’t be long for this world. Expect to see the biggest cuts in heavily populated metropolitan areas.

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BFG: 1000 miles of GO

April 26, 2009 by Gary Grant Leave a Comment

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In their next installment of the search for GO, the folks at BFG follow their off the rack Mud-Terrain T/A KM2 to the Baja 1000. There are few forms of motorsport that dish out more punishment than desert racing. It is pretty incredible that actual consumer tires can tackle this sort of abuse.

To go fast in the desert takes lots of preparation & dedication, not to mention just a little dose of crazy. That crazy passion certainly equates to GO.

Check out the video after the break
[Read more…]

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Forgotten Sporty Cars XIII: Mercury Capri

April 25, 2009 by Tom Williams 19 Comments

Welcome back to Forgotten Sporty Cars at The Garage! In this space we recall an era where small, economy car-based based vehicles were sold with zippy styling. Whether there was any substance to the sizzle we’ll leave for you to judge.

1991-1994 Mercury Capri

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Mercury has the dubious honor of being mentioned three times on the Forgotten Sporty Car series, which is odd considering the brand is the last you would think of when asked about sporty cars. Yet we’ve examined the Mercury LN7 and the Mercury Cougar thus far. 

Today’s subject is the Capri. Like the Cougar that came later, Mercury recycled a previously used name. The 1979-1986 Mercury Capri, as the PR people would have you believe, was a cousin to the Ford Mustang but with a “European flavor”. The concept sounds even sillier today than it did back then.
[Read more…]

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BFG: 25 Hours of GO

April 25, 2009 by Gary Grant Leave a Comment

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In my first post about the search for GO, I mentioned a connection to The Garage. Did anyone catch the connection? No? Well, occasional contributor to The Garage, Will Faules, is the PR guy at Thunderhill Raceway which was heavily featured in that opening sequence. This second video follows Boris Said on his quest to win the legendary 25 Hours of Thunderhill. Boris is one guy who definitely has GO!

Check out 25 Hours of GO after the break
[Read more…]

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Corvette Forum breakfast meet

April 25, 2009 by Gary Grant 2 Comments

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Young Riley & I were out shooting pictures of the 2010 Lincoln MKZ at Whitby harbour this morning and on our way home we noticed a lot full of Corvettes. Of course we had to drop by for a quick visit. It turns out that it was a breakfast meet-up of the Corvette Forum. Even more surprising was that our old friend Mike D`Angelo was there with his red beast. Of course it wasn`t all Vettes, as there was a 2010 Camaro cruising in and out and the red GT500 stuck out like a sore thumb in the middle of all that fibreglass.

We`ve got a huge gallery after the break
[Read more…]

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BF Goodrich hunts for GO

April 25, 2009 by Gary Grant 1 Comment

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Over the years, many have tried to find a simple way to describe the passion that drives racing enthusiasts. BF Goodrich is about to launch an online campaign looking for what they call GO.

GO. I like that. It does a good job of summing up what this passion is all about.

To build some excitement, the folks at BFG have put together some killer short videos that take us from the desert to the track, following folks who have some serious go. In this first video, “What is GO?”, sharp readers might notice a subtle connection to The Garage. Don’t know what it is? We’ll let you in on the connection in the next video.

Video after the break of course
[Read more…]

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