More bad news for the US car industry
With what seems to be a never-ending tale
of woe, auto parts supplier Delphi filed for bankruptcy in New
York after attempting to stave off what was to become
Delphi, hurt by high wage and benefit costs
inherited from former parent General Motors, put its U.S.
operations into Chapter 11 bankruptcy, now becoming the
largest ever in the history of the auto industry in the US.
The company employs 185,000 people worldwide.
Delphi, the largest American auto supplier
and the world’s second-largest, filed for Chapter 11
bankruptcy protection for itself and 38 US units. Non-US
subsidiaries were not included in the filing, so the lads at
Delphi here must have breathed a sigh of relief. But for how
Delphi has struggled since GM spun it off
in 1999, posting net losses of $741 million in the first half
of 2005 alone. The parts maker’s petition listed total
assets of $17.1 billion as of Aug. 31 and debts totalling
$22.17 billion. It had sought financing from GM (who are not
really in the position to prop it up, or they would have hung
on to the company) and sharp cuts in wages and benefits from
the UAW (United Auto Workers) to restructure unprofitable U.S.
Delphi’s hourly wage of $65 an hour
including benefits is uncompetitive, and a jobs bank that pays
idled workers 95 percent of their wages is costing the
Michigan supplier about $400 million this year. That is more
than half the shortfall in the first six months of this year.
No company in tight economic times can absorb that kind of
Delphi had been seeking substantial relief
from GM and the UAW. With the Chapter 11 filing, those two
parties have lost their power to control events. The
bankruptcy judge is now empowered to strip union benefits and
force parts price increases on Delphi customers.
Current shares of Delphi will most
certainly be worthless, since companies almost always cancel
stock in a Chapter 11. That affects employees and retirees who
were granted or invested in Delphi shares.
But there are further knock-on problems.
Delphi’s 2,000 US suppliers also would be hurt if the court
initially freezes about $1.9 billion that Delphi owes them for
parts already delivered. With 25 percent or more of the North
American supply base already stressed financially, the
inability to get paid what Delphi owes them could cause a
flow-on of bankruptcies and failures.
Now is probably not the time to invest in
the US auto industry. Making pasta sounds a lot more
What did we
learn from the Chinese GP?
Well, it was a fittingly dull end to a
dreadfully dull year. Forget the media hype about the “young
guns” on their way up, “Schumi’s reign ended” and
“an exciting finish, all the way through to the last race of
the year before the manufacturer’s championship was
decided.” At best the manufacturer’s championship is
second prize in the beauty contest. Who cares? Only the
manufacturers themselves. I certainly do not.
What else? Schumi and Albers come together
on the way to the grid. The concept is unbelievable. That’s
like Paradorn hitting Agassi on the head as they come down the
steps on the way to the tennis court! The only thing you can
draw from that effort is that both teams managed to get their
drivers out in new cars by the time the lights went out. Fine
efforts under pressure, by the crews.
The Chinese GP will also be remembered for
26 minutes under the safety car. Any more and it would have
had to come in for refuelling! The ground crews seemed totally
inept as far as clearing debris in a hurry was concerned. One
quarter of the world’s population is Chinese, and here they
were, standing in a line, kicking at the debris with their
imitation Dunlop sandshoes! Spare me! Don’t they have brooms
over there? And the guy who picked up the drain cover and
sprinted away with it looked more like a scrap metal merchant
on a mission than a marshal. Or perhaps there’s a new entry
in eBay – “as abused by Juan Pablo Montoya”.
Passing? What’s that? Other than Rooby
Baby being pressured into mistakes by just about everyone, I
can’t really remember any, but that might indicate that I
spent the race nodding off with excitement.
The Chinese GP was also the swansong for
Minardi, but I do not think there is anyone in pit lane who
will be mourning the non-attendance of the Johnny-come-lately
abrasive Aussie, Paul Stoddart, giving farewell speeches as if
he had started Minardi and kept it afloat. He will not have
lost money. His type never do. Minardi now becomes Squadro
Toro Rosso or something similar. Final place on the grid is
Peter Sauber retires and Sauber becomes
BMW, who will only stay in motorsport until they win a
championship, or the board of directors look at the balance
sheet and pull the pin. It is difficult to justify involvement
in F1 to bean-counters.
And Jordan becomes Midland F1, bankrolled
by roubles from Russia and headed up by the Kremlin’s answer
to Paul Stoddart. Or am I becoming cynical in my old age?
Petrol-electric Camry on the
The news from down-under, where many of the
Toyota products come from, is that there could be a
petrol-electric hybrid coming mid year 2006 in the new Camry
line-up. Considering that Toyota is selling as many hybrids as
they can manufacture, this is probably a very positive sign as
to where the motoring world is heading. Apparently the
Japanese production has gone from 10,000 a month to 15,000.
The proposed diesel-powered Camry does not look as if it is
going to see the light of day.
The original hybrid vehicle that Toyota
promoted in Australia was the Prius. Listen to these
interesting figures. Originally, the market penetration for
private buyers was around 4 percent, the rest of the quota
being taken by “green” government departments. Prius II
now enjoys a 38 percent private market penetration.
Toyota Motor Corporation also says it will send the hybrid
Camry to America. The next generation of “limousines” at
Suvarnabhumi Airport look like being clean and green!
Last week I mentioned that a French car
company decided to expand beyond its national boundaries and
opened up a new factory in 1906. This venture was not
successful and three years later it was taken over, and
started producing cars using foreign designs and a line of
credit from several banks. This was again not successful, so
the principal creditor called in a railway engineer to run the
manufacturing business. He turned out some very creditable
designs (nothing like a railway engine), and although still
somewhat financially shaky, the company still exists today.
The question is – what was the name of the railway engineer?
It was Nicola Romeo who gave the world Alfa Romeo.
So to this week. The first Monaco Grand
Prix was won by a Williams. True or false?
For the Automania FREE beer this week, be
the first correct answer to email firstname.lastname@example.org
Three robotic vehicles
finish $2 million Mojave Desert race
Not generally reported in the popular press
was the result of a two million dollar challenge in the US for
driverless vehicles. These were not small radio-controlled
toys, but full-sized vehicles such as a Hummer, a Volkswagen
and a HumVee.
According to Alicia Chang, AP’s Science
Writer, 23 robotic vehicles left the starting line to race to
the finish across the Mojave Dessert 132 miles away, with
eight making it through to the end.
It was not a straight line course either;
the unmanned vehicles had to use their computer brains and
sensing devices to follow a programmed route and avoid hitting
Teams were given a CD-ROM with GPS
coordinates that charted the exact route, which included
rough, winding desert roads and dry lake beds filled with
overhanging brush and man-made obstacles. The machines had
also to traverse a narrow 1.3 mile mountain pass with a steep
drop-off and go through three tunnels designed to knock out
their GPS signals.
The vehicles were tricked out with the
latest sensors, lasers, cameras and radar that fed information
to several onboard computers. This, in turn, helped vehicles
make intelligent decisions such as distinguishing a dangerous
boulder from a tumbleweed and calculating whether a chasm was
too deep to cross.
The Grand Challenge race was part of the
Pentagon’s effort to cut the risk of casualties by
fulfilling a congressional mandate to have a third of all
military ground vehicles unmanned by 2015. The military
currently has a small fleet of autonomous ground vehicles
stationed in Iraq and Afghanistan, but the machines are
remotely controlled by a soldier who usually rides in the same
convoy. The Pentagon wants to eliminate the human factor and
use self-thinking robotic vehicles to ferry supplies in war
Avanza gets its nose rubbed
The family PPV (Perpendicular People Mover)
Toyota Avanza had a little problem the other day in the rain.
With my wife at the helm she gracefully slid into the rear of
a pick-up at around zero kph. Damage to pick-up was nil, and
at night, the damage to Avanza looked fairly minimal too.
However, she found she could not use the
remote locking, as the car knew its bonnet was not properly
closed and would start beeping as soon as she walked away. We
were now in the situation that many of us have experienced.
You need a panel shop that speaks your language, that can give
you a sensible quote, and that can back up their work. Not all
We had already decided that we would be
better off paying for the repair ourselves, rather than put it
through on insurance, for which we had to pay the first B.
5,000 anyway, and then there would be a corresponding increase
in next year’s premium.
Having heard about “Go Fast Auto Body
Repair”, I decided to give them a ring. A comforting UK
accent from owner Graham Isherwood indicated that he did
indeed speak my language, and I visited his new shop at
Naklua. The premises has a state of the art spray booth, which
was also reassuring, the cars not being sprayed between
showers on a dirt area outside the building, as I have seen
too many times in this country, with the finished product
having more runs on board than Ricky Ponting, not to mention
the odd fly and mosquito.
A quotation was arranged while I waited,
and when I indicated that I was happy with it, was told to
bring the car in the following morning, with the estimated
time of completion being two and a half to three days.
I took the opportunity to call in the
following day to inspect the damage first hand. As always in
these situations, there will be damage that is not obvious
until tear-down, in our case, headlight brackets that had
sheared. However, I need not have worried, as Go Fast Auto
Body Repair already had photographs of the damage, which I
would have been shown anyway. When Graham told me that a new
headlight unit was around B. 15,000, I was very relieved to
find that he had been able to effect a repair, very much
On the third day, Graham rang again to say
that the car would be ready late afternoon, which was a boon,
as I could then arrange my day around this slightly revised
My wife was astounded, the car looking
pristine and new again, and I was impressed with the
meticulous panel fit that they had managed to achieve. I am
always happy to pass on information that can be of value to
the readers, but I would have no qualms about using him again
– but I hope I don’t have to! And before you ask, I paid
for the work.
Go Fast Auto Body Repair, 554/9 M4, Soi
Chaiyapornvitee Naklua (that is the road that leads to the
Million Years Stone Park). Graham’s mobile is 01 295 3507.