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AutoLine: Episode 171 - Opel Still Up For Grabs, GM Shakes Down Chrysler, E85 for Everybody

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Runtime 6:15

GM says even though it signed a letter of intent with Magna, it’s still open for offers for Opel. GM went to court to try to get the “new” Chrysler to pay for its part to develop two-mode hybrids. The Energy Secretary wants all cars built in the U.S. to be able to run on E85. All that and more, plus John answers viewer questions in the “You Said It!” segment.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. GM looks for new partners for Opel. GM sues Chrysler for hybrid money. And the Energy Secretary wants E85 for everybody.

Up next, we’ll be back with the news behind the headlines.

This is Autoline Daily for Wednesday, June 24, 2009. And now, the news.

What’s going on with GM’s deal to sell part of Opel? After turning Fiat away, and seemingly going with supplier company Magna, and Russian bank Sberbank, GM says even though it signed a letter of intent with Magna, it’s still open for offers (subscription required), reports the Wall Street Journal. Now the Beijing Auto Industry Company is looking over the books and so is investment firm Ripplewood, which was an earlier bidder that dropped out but is now back. GM is presenting this as a “Plan B,” in case the Magna deal falls through. And maybe it’s a negotiating tactic to get a better bid out of Magna. But something tells me there’s more to this story than anyone is letting on, especially when you see Ripplewood back in the picture.

Honda’s senior VP in charge of Purchasing in the United States is resigning from the company. Larry Jutte, 53 years old, said he made a difficult decision to leave the company to move on to the next phase in his life, reports the Detroit Free Press. In a recent survey of suppliers Honda was rated as the best car company to work with, but the company’s ranking has been slipping for a number of years.

Autoblog reports GM went to court to try to get the “new” Chrysler to pay $531,000 for its part to develop two-mode hybrids. GM, Chrysler, Mercedes and BMW joined forces to develop the hybrid system. Chrysler has only agreed to refund about a third of what it owes. Chrysler only built a handful of two-mode SUVs before it cancelled production.

But hey, who needs hybrids when you have biofuel? The Des Moines Register reports that U.S. Energy Secretary Steven Chu wants all cars built in the U.S. to be able to run on E85. The proposal will probably draw fire from foreign automakers, but it costs less than $100 to convert a car to run on E85.

But who needs biofuel when you have EVs? Yesterday we reported the U.S. government was set to hand out loans to Ford, Nissan and Tesla to help them build green cars, now we know how much they got. According to the Detroit News, Ford received just under $6 billion to retool and update factories. Nissan received $1.6 billion, three times what we reported yesterday, to build electric vehicles at its plant in Tennessee. And Tesla received half a billion to build a cheaper version of its EV.

In an interview with a Chinese news site, Hummer CEO Jim Taylor says Sichuan Tengzhong Heavy Industrial Machinery Co. will be an investor only in Hummer and not run day to day operations. According to Gasgoo.com, despite criticism that Tengzhong doesn’t know enough about the auto industry, Taylor believes the deal will work because Hummer executives bring all the experience and expertise they need to the table. The deal is expected to be completed by the end of August.

Coming up next, I respond to some of your questions and comments, we’ll be back right after this.

Well, it’s Wednesday, and that means it’s time for “You Said It!”

Every day we get a slew of comments and questions from you, our loyal audience. “You Said It!” gives me a chance to respond.

Tony Gray heard my criticism of J.D. Power’s Initial quality Survey and wrote in to say,
*Intercom buzzes* “John, there’s a Rocco and Nunzio from J.D. Power to see you.”

Tony, I’m sure J.D. Power is not happy with my criticism, but all I can tell you is that I have an even bigger problem with the way Consumer Reports rates the quality of cars.

Tom G. asks a question a lot of people want to know about. “Just exactly what are the differences in the diesel emission standards between North America and Europe?”

Tom, there are a number of differences but the biggest one, and the one that causes the huge cost difference is with NOx, oxides of nitrogen. Our current standard is one-fourth less than what Europe has to meet, or to put it another way, European diesels put out roughly four times more NOx than what is allowed in the U.S.

And finally ej wrote in about our report of Nissan getting retooling money to build electric cars in the U.S. “Are you kidding me?!,” he says, “Nissan wants $500,000,000 of U.S. taxpayer money! That’s not even funny!”

EJ, this is a subject that’s hit a raw nerve with a lot of people. All I can say is I’d much rather see Nissan building EVs and the batteries that will go in them here in the U.S., than importing them from Japan.

But join us tomorrow night at 7 p.m. Eastern for Autoline After Hours. Joining me, Jason Vines and Peter Delorenzo will be Denise McCluggage, one of the most interesting people I’ve ever run across in this industry. From race driver, to journalist, to opinionator, Denise has been a trailblazer for over 50 years. Best of all she tells it like it is.

And that brings us to the end of today’s broadcast, thanks for watching, we’ll be back tomorrow.



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Autoblog reports GM went to court to try to get the “new” Chrysler to pay $531,000 for its part to develop two-mode hybrids. GM, Chrysler, Mercedes and BMW joined forces to develop the hybrid system. Chrysler has only agreed to refund about a third of what it owes. Chrysler only built a handful of two-mode SUVs before it cancelled production.

I hope the courts tell "new GM" to stuff it. By demanding this money from "new Chrysler", they are being hypocritical. "New GM" is blowing off most of it's "old GM" obligations, so should "new Chrysler". "New GM" simply got outfoxed in BK court by the "new Chrysler" and should stop wasting their lawyer's money and the court's time. Its the way BK court works... live by the sword...

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I hope the courts tell "new GM" to stuff it. By demanding this money from "new Chrysler", they are being hypocritical. "New GM" is blowing off most of it's "old GM" obligations, so should "new Chrysler". "New GM" simply got outfoxed in BK court by the "new Chrysler" and should stop wasting their lawyer's money and the court's time. Its the way BK court works... live by the sword...

It's just part of the process - you ask for every dollar that was owed, and take what you can get. I think it's likely to come down to Chrysler either paying up to continue to have access to the tech, or not and losing access.

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uh they are suing them for $531K? that will be just enough to cover the court costs right? Douche bags.

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