For leading auto industry forecasting firm CSM Worldwide, the Detroit-3 is already the Detroit-2. At a gathering of the Automotive Press Association in Detroit today, the firms chief of forecasting Michael Robinet said, Chrysler doesnt have the scale to survive. Robinet and his partners posited that the only pieces of Chrysler worth saving going forward are the companys unique platform modelsminivans, Jeep Wrangler and perhaps the pickup truck business. The firm also noted that the companys dealer network should be attractive to a foreign automaker, which, if acquired, would wind down Chryslers models and start to introduce its ownthink one of the Chinese automakers. One of the more disturbing reports from CSM was that with auto sales dropping to 11 million or so next year, capacity utilization among the companies will be about 50%. Ouch. Thats down from around 75%. The ideal, of course, is between 90% and 100%. The drop in utilization is because the planst arent closing fast enough and because slow-selling models havent been cancelled fast enough. Case in point: Chrysler operates a plant in Sterling Heights Michigan that turns out Chrysler Sebrings and Dodge Avengers. Last month, Chrysler sold only about 4,200 Chrysler Sebrings and Dodge Avengers. Through November, those two models only sold 106,000. The assembly complex is 3 million square feet and 286 acres. I dont have the current employee level. But in March 2007, it was carrying 4,500 workers. That's the kind of capacity removal that the UAW is going to have accept without condition if they still want to have an industry. The Sebring and Avenger, developed by Daimler have been hopeless. They languish at te bottom of almost every third-party measurement of quality and consumer appeal. It's not the UAW's fault that the designs and executions of these models were botched. But there it is. And here we are. Another interesting point raised by CSM: By 2011, after planned plant closures by the Detroit-Two and Chrysler, the U.S. auto industry will account for a minority of U.S. vehicle production. Today, its about 54%. In a couple of years, they will be down to 46%. The CSM report and partners also pointed out an incredibly obvious point that is worth making again while the Congress debates whether to let the domestic auto industry take its chances in bankruptcy court. CSMs Eric Fedewa, who is the firms power-train expert, made the point that very few members of Congress care about; that Japan and Germany have created an industrial policy in their countries that creates stability in their marketplaces for energy prices. If we had gas prices [a price floor] between $3.50 and $4.00, we would see more stability in the marketplace to allow for better product planning, innovation and technology investment. Case in point: If the U.S. had a policy that our partisan, dysfunctional Congress could get behind, the U.S. industry wouldn't have over-committed to making SUVs in the late 1990s and in the first few years of the new century. Fedewa called Congress's approach to policy-making "ad hoc" and seat-of-the-pants." He was being generous.  read more »

Executives from Chrysler, Ford, and General Motors are traveling to Washington, D.C., this week to appeal to lawmakers for federal assistance. On their last visit, the Detroit execs were chastised for indulging in corporate jets each in their ownwhile appealing for billions in tax-payer-funded assistance. to avoid repeating that public relations gaffe, these power brokers are driving to the Capitol. The auto industry is behind them, literally, with representatives from all 50 states heading to Washington to show their support Friday.  read more »

As the humbled captains of the U.S. auto industry spend the weekend preparing their second case for a federal bailout, their best argument may come in November's auto sales figures.

Industry watchers and car dealers say they expect this month's vehicle sales to come out slightly better than October's historic lows, but increased incentives haven't been enough to overcome tight credit, the crumbling economy and weak consumer confidence that are keeping consumers away from showrooms.

"All those major factors that had an impact on new car demand so far this year are still with us," said Jesse Toprak, executive director of industry analysis for the automotive Web site Edmunds.com.
Edmunds is expecting sales to drop 28 percent from a year ago to 850,000 units when automakers announce their November sales Tuesday. Barclays auto analyst Brian Johnson predicts a 32 percent plunge. Other analysts are just as pessimistic and expect U.S. car companies to take the biggest hit.  read more »

Another Sacramento-area auto dealership has abruptly closed its doors, the latest apparent victim of an economic downturn that has battered the auto industry nationwide.

Saturn of Elk Grove in the Elk Grove Auto Mall closed Friday afternoon, adding to the list of about a dozen area dealerships that have gone away this year alone.

The National Automobile Dealers Association recently said 590 U.S. car dealerships have closed in 2008, and the number is expected to reach 700 by year's end, up from 430 last year.

Louis Solis, general sales manager of the Saturn dealership at 8480 Laguna Grove Drive, said 32 employees were given a severance package that included six weeks' pay and vacation pay.

"Unfortunately, we just let our employees know that we're shutting the store down," Solis said. "We all went to lunch. … It was hard to see all those who have been working for us for years.

Desperate times call for desperate measures, and no one in Detroit is more desperate than General Motors -- which explains why the General is lookin' to marry cross-town rival Chrysler. They've been courting for about a month now, and it's...


Ben Mack

Dodge and the new Dodge Ram have been under fire quite a bit lately, and for good reason: Two years in a row, the Toyota Tundra has been more American than the Dodge Ram. With the price of gas dropping every day, Dodge’s “fuel price protection program” officially ripped-off thousands of truck buyers. The auto industry has been [...]