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General Motors Co. will fund a major restructuring of Opel and Vauxhall without state aid after the automaker decided to withdraw applications for government loan guarantees from European governments.

GM plans a 3.3 billion euro ($4 billion) reorganization to cut its European capacity by 20 percent and workforce by a fifth, and rejuvenate the bulk of Opel’s model lineup through the end of 2014.

Last week, the German government refused GM’s request for 1.1 billion euros in loan guarantees from the country’s state rescue fund for companies hit by the economic recession. The UK and Spain had earlier indicated they would be willing to provide state aid sought by GM from European countries with Opel factories.

Opel CEO Nick Reilly said today the company could not afford to have uncertain funding plans and new time-consuming complex negotiations at a time when GM Europe needs to keep investing in new products and technologies.

“In these circumstances, and given the need to progress the plan quickly, it has been decided to fund the requirements internally. GM’s recently improved financial strength has also been a catalyst for making this decision,” Opel said in a statement.

Reilly said Opel’s funding needs have not changed, adding: “We are grateful for the support of our parent company, which will allow us to move forward with confidence in this very competitive industry.”

With new products and the impact of restructuring, Opel expects to return to profitability shortly, Reilly said.

GM’s European operations have lost $1.3 billion since the automaker exited bankruptcy last year. It was the only GM region to lose money in the first quarter.

GM has already agreed to contribute 1.9 billion euros of U.S. taxpayer funding to keep Opel afloat. For months the company had insisted it needed European governments to pitch in to restructure its money-losing European unit.

But GM’s turnaround from bankruptcy to profitability in just 12 months, which helped it hang on to Opel, undermined the unit’s efforts to win state aid. In the first quarter, GM earned $865 million worldwide – its first quarterly profit since 2007.

Excluding funds in escrow, GM had gross cash of $23.3 billion at the end of March compared with $14.2 billion in debt. Its first-quarter funds from operations exceeded capital expenditure by about $1 billion.

GM has also rankled the German government, which last year brokered a deal to sell the carmaker to Canada’s Magna International. But at the last minute GM decided to keep and restructure Opel rather than sell it.

Opel said it will now be able to fully implement a new strategic plan, in particular investments in future products that were announced in February.

As part of GM’s bid for European aid, the UK had committed guarantees for 330 million euros of bank loans and the Spanish government indicated they would approve a similar amount.

German federal states with Opel factories expressed a willingness last week to enter into new negotiations about aid.

In a restructuring plan unveiled last year, GM said it would reduce 8,300 of 48,000 jobs across Europe, with 4,000 cuts coming in Germany.

The automaker is eager to have a turnaround plan in Europe in place before proceeding with a planned stock offering and emerge from U.S. government control, possibly as early as this fall.

If there’s one thing known about the work General Motors Co. has ad agency Goodby Silverstein & Partners working on, it’s that the shorthand “Chevy” won’t be used in any communications.

The New York Times got its hands on a memo that GM sent to employees Tuesday, which, in the name of consistency for its biggest brand, tells staffers to quit saying “Chevy.” GM responded to the resulting “emotional debate” by embracing customers’ use of the abbreviated name and saying the memo was poorly worded.

The note wasn’t signed by GM’s new marketing chief, Joel Ewanick, who hired Goodby when he joined the Detroit automaker from Nissan last month. It was signed by Alan Batey, vice president of Chevrolet sales and service, and Jim Campbell, the division’s vice president of marketing.

The memo said:

“We’d ask that, whether you’re talking to a dealer, reviewing dealer advertising or speaking with friends and family, that you communicate our brand as Chevrolet moving forward …

“When you look at the most recognized brands throughout the world, such as Coke or Apple, for instance, one of the things they all focus on is the consistency of their branding … Why is this consistency so important? The more consistent a brand becomes, the more prominent and recognizable it is with the consumer.”

Coke vs. Coca-Cola

The Times story noted that Coke is short for Coca-Cola and cited an expert saying GM’s initiative ran counter to a trend towards “more casual” branding, such as KFC for Kentucky Fried Chicken.

Autoblog.com, one of many Web voices taking GM to task for the memo, said: “We feel that the Coke comparison GM uses in the memo is ultimately rather apt, given that the idea of memory-holing “Chevy” as part of some absurd branding exercise seems destined to be a failure on the level of New Coke.”

In its statement, GM said today’s fuss showed “how passionately people feel about Chevrolet.”

“We love Chevy,” GM said. “In no way are we discouraging customers or fans from using the name. We deeply appreciate the emotional connections that millions of people have for Chevrolet and its products.

“In global markets, we are establishing a significant presence for Chevrolet, and need to move toward a consistent brand name for advertising and marketing purposes. The memo in question was one step in that process.”

A GM spokesman told the Times that it the move was influenced by Goodby.

A ‘Chevy’ worth 25 cents

A postscript to the memo says a plastic can has been placed in the hallway, and “Every time someone uses ‘Chevy’ rather than Chevrolet,” an employee is expected to toss in a quarter.

GM’s own Twitter page says “Talking Chevy One Tweet at a Time.” It has also sponsored links on Google driving folks to the Web site by calling it “The Official Chevy Site.”

Chrysler Group LLC is recalling almost 575,000 Jeep sport-utility vehicles and Dodge and Chrysler minivans for brake line and wiring defects, U.S. safety regulators said.

The company recalled 288,968 Jeep Wranglers for 2001 through 2010 to repair a defect caused when liners inside the fenders touch right-front and left-rear brake lines, leading to wear that may cause fluid to leak and raising the risk of a crash, the National Highway Traffic Safety Administration said in a statement on its Web site today.

Chrysler isn’t aware of accidents or injuries related to the fluid leak, the automaker told the agency in a June 1 letter. Repairs should begin this month, the agency said. Vehicle owners were directed to call Chrysler at 1-800-853-14903 or visit NHTSA’s website.

“A brake fluid leak can cause partial loss of service brakes at the affected wheel, increasing the risk of a crash,” NHTSA said in the statement.

The company also recalled 284,831 Dodge Grand Caravan and Chrysler Town & Country minivans from the 2008 and 2009 model years, citing a sliding-door hinge that can wear through wire insulation, causing a short circuit and possible fire, the agency said.

Chrysler, controlled by Italy’s Fiat SpA after filing for bankruptcy last year, learned of the Wrangler leak on Feb. 25 in a report on the flaw in a 2008 model, according to the letter.

The automaker will recall the vehicles “to inspect and remove potential areas of liner contact with the brake line,” Chrysler spokesman Nick Cappa said in an e-mail. Repairs will be made without charge to the customer, he said.

The brake-component manufacturer is TI Automotive, based in Warren, Mich., according to Chrysler’s letter to NHTSA.

Chrysler issued a recall last week for almost 35,000 Dodge and Jeep vehicles for accelerator pedals that may become stuck or fail to immediately return to the idle position.

NHTSA last week also began investigating Ford Motor Co. cars for pedals that may become stuck on floor mats.

Toyota Motor Corp. forecast profit will rise 48 percent this fiscal year as it recovers from record recalls in North America, its largest market, and boosts sales in Asia outside Japan.

The company may increase net income to 310 billion yen ($3.35 billion) in the year ending in March, from 209 billion yen a year earlier, the automaker said in a statement today.

Toyota’s U.S. sales rose 24 percent in April as incentives boosted demand for its Corolla and Prius models and offset the impact of recalls of more than 8 million vehicles worldwide for defects related to unintended acceleration. Toyota’s North American sales may increase 1.5 percent this fiscal year to 2.13 million vehicles, the company said, as the region recovers from a recession.

“North America is the only market that matters” for Toyota’s earnings this year, said Gentoku Kiyokawa, a fund manager in Tokyo at Fortis Investments, which bought Toyota shares in February. “Based on the recent sales numbers, the recalls aren’t posing a problem.”

Toyota’s U.S. sales dropped 20 percent in 2009, as industrywide sales slumped 21 percent to 10.4 million units, the lowest level since 1982.

The company’s sales in the United States surged 41 percent in March, after it introduced discounts across its lineup.

50,000 lost sales

Lost sales due to the recalls for the year ended in March amounted to about 50,000 vehicles, compared with an earlier estimate of 100,000, Toyota Senior Managing Director Takahiko Ijichi said at a press conference in Tokyo today. The cost of the recalls was between 170 billion yen and 180 billion yen, he said.

“We are still in the middle of the storm, but I am feeling that we can see clear skies in the distance,” President Akio Toyoda said.

While Toyota didn’t say by how much the recalls will cut profit this year, related costs, such as a $16.4 million fine from the National Highway Traffic Safety Administration, are included in the forecast for the year ending in March 2011, it said. The company set aside an extra 100 billion yen in provisions for warranties last fiscal year.

Toyota also expects to benefit from cost savings of 290 billion yen, including cuts to executive compensation, Toyoda said. That may help operating profit surge 90 percent to 280 billion during the current financial year, according to today’s statement.

Increasing competition

Still, the Japanese carmaker must fend off increasing competition in the United States from Ford Motor Co. and Hyundai Motor Co.’s new models, said Jessica Caldwell, senior analyst at Edmunds.com.

“This will be a tough year for Toyota,” Caldwell said. “They’ve fallen weak at a time when their competitors are so strong.”

Sales of Hyundai’s revamped Sonata sedan, which was introduced in the United States in February, surged 57 percent in April. The model competes with Toyota’s Camry sedan, sales of which gained 10 percent that month. Ford’s April sales rose 26 percent.

Competition in the U.S. is “intensifying” as American competitors have strengthened their passenger car lineups and Hyundai’s presence is increasing, Honda Motor Co.’s Executive Vice President Koichi Kondo said on April 28.

In the fourth quarter, Toyota posted net income of 112 billion yen, compared with a loss of 766 billion yen a year earlier. Toyota was projected to post 48.3 billion yen in net income based on the average of four analyst estimates compiled by Bloomberg. Sales for the quarter rose 49 percent to 5.28 trillion yen.

Toyota based its full-year forecast on exchange rates of 90 yen to the dollar and 125 yen to the euro, compared with an average 93 yen against the dollar and 131 yen against the euro last fiscal year.

The automaker predicts sales in Asia excluding Japan will rise 11 percent to 1.09 million vehicles this fiscal year. In Japan, its second biggest market, sales are expected to drop 11 percent to 1.92 million. In Europe, the company forecasts sales of 860,000 vehicles, an increase of 0.2 percent from the last fiscal year.

Toyota also said it plans to review models and improve the efficiency of its production structure in Japan, North America and Europe.

New auto safety legislation proposed in the wake of Toyota’s recall problems is drawing criticism from House Republicans and Michigan Democrat John Dingell, suggesting that changes are in store for the Democratic leaders’ bill.

Republicans on the House Energy and Commerce Committee said almost unanimously today that the draft bill would unduly expand government authority and undercut automakers while they are rebounding from a severe slump.

“I’m not sure it’s time to pile on the auto industry,” Rep. Joe Barton of Texas, the top Republican on the committee, said at the hearing of the subcommittee on commerce.

Dingell, in a statement, said: “As with most first drafts of legislation, the Waxman-Rush bill has provisions that, in my view, require improvement, especially as they relate to the bill’s practicability, both for federal regulators and those subject to federal regulation,” Dingell said in a statement.

Chairman Henry Waxman, the bill’s chief sponsor, said his goal was to have the committee pass a bill that both Dingell and he could support.

The measure seeks to improve vehicle safety technology by establishing performance standards for brake override systems, black-box crash data recorders, pedal placement and electronic systems.

Doubling funding

It also would toughen federal oversight by removing the $16.4 million cap on fines, giving the National Highway Traffic Safety Administration the authority to order a recall if it identifies an imminent hazard, doubling federal funding for NHTSA and imposing fees on automakers to fund increased resources for the agency.

“The recent Toyota recalls severely rattled the driving public,” Waxman said. “This legislation meets the public’s urgent concerns.”

A couple of bill provisions drew bipartisan support, most notably the requirement for brake override systems.

A new override standard “is something we certainly support,” Barton said. He and Rep. Ed Whitfield, R-Ky., also endorsed a proposal for a more consumer-friendly NHTSA complaint database.

The Senate Commerce Committee is to hold hearings on a similar bill introduced this week.

White House: no position yet

The Obama administration has not yet taken a position on the bill, NHTSA Administrator David Strickland said in an interview before the House hearing.

In prepared testimony, though, he expressed support for a couple of provisions, including giving NHTSA the authority to order recalls if it thinks a hazard is imminent.

“This provision gives NHTSA an important avenue through which to deliver on its consumer protection mission — a mission I strongly believe in,” Strickland’s written testimony says.

Rep. Bobby Rush, the subcommittee chairman, criticized Strickland’s testimony.

“There’s a lack of detail that leaves us wanting,” said Rush, D-Ill.

Strickland said the Transportation Department and the White House were still reviewing the legislation. The bill “does give a fantastic foundation in helping us be a stronger and more transparent agency,” he said.

Dingell questions

Dingell asked Strickland whether the proposed $3-per-vehicle fee for automakers was arbitrary and whether it matched the agency’s needs.

The lawmaker also asked whether fines on automakers should be subject to judicial review, and whether NHTSA had a definition for the kind of “imminent hazards” that could trigger immediate vehicle recalls.

Finally, Dingell asked if there was some guarantee that the new safety technology requirements would be limited to new cars.

Strickland promised to get responses for Dingell.

Wouldn’t start yesterday. Lots of corrosion on the wire bundle, we couldn’t even unlock the ignition. Cleaned that all up, and it cranks over good, but doesn’t want to start. Any ideas?
This is my sisters car, and I don’t even know where the carburetor is lol. The car is driven daily.

Response:
Before you crank the engine and with the key in the Run position can you hear the Fuel Pump run for a couple Seconds? Sometimes it takes 2 people with 1 listening at the fuel cap with it off. If it runs then, Check for Spark at 1 of the plugs. Also check to be sure that the Spark Plugs are NOT fowled or wet appearing. If they are get New Plugs and BEFORE you install them crank the engine over to clear out excessive fuel. Also disconnect the Ignition to Prevent a Fire before you crank it. Safety First!!

http://www.freeautomechanic.com/nostart.html

General Motors Co.is mating Goodyear’s Fuel Max radials with lightweight forged aluminum wheels from Alcoa Automotive Wheels on the 2011 Chevrolet Cruze Eco, a high-mileage version of the carmaker’s new compact.

Alcoa claims GM’s 17-inch wheels are 20 percent lighter than comparable cast aluminum wheels, helping to reduce the car’s weight. GM is promoting the six-speed Cruze Eco as capable of 40 mpg on the highway.

The four-door hatchback Cruze Eco is powered by a turbocharged 1.4-liter Ecotec four-cylinder engine rated at 138 hp. It also features tweaks such as a lower front grille air shutter that closes at higher speeds to improve aerodynamics and opens at lower speeds to optimize engine-cooling airflow, GM said.

Not only do forged aluminum wheels reduce mass to help lower emissions and fuel consumption, Alcoa said, they also improve driving performance and efficiency by reducing unsprung weight.

“Closely following the launch of our Volt wheel program, the Chevrolet team pursued a wheel providing lightweight performance that would further extend fuel economy for this latest vehicle,” Victor Marquez, vice president and general manager for Alcoa Auto Wheels, said in a statement earlier this week.

Alcoa’s contract for the Cruze is a multiyear deal, the company said. The wheels are made at Alcoa’s Cleveland plant.

The Cruze is expected in dealers’ showrooms this fall. GM has not released sales expectations for the vehicle, which it is pitching as an alternative to hybrids.

- Honda Motor Co.’s new CR-Z sporty hybrid is the car that nearly wasn’t.

The wedge-shaped, two-seat hatchback was almost killed twice because engineers weren’t convinced it was a unique concept and because U.S. bosses originally didn’t want it.

When Norio Tomobe was appointed chief engineer of the project in the summer of 2004, the car was still a blank sheet. And in the early years, the working model had a traditional gasoline engine.

“We had serious doubts about whether this would bring new value,” Tomobe said during a recent interview at Honda’s headquarters here. “I really struggled for a new idea, and we decided to start over from scratch. The hybrid finally gave us the wow factor.”

Yet going hybrid brought its own problems. Today critics assail the CR-Z as neither especially fuel-efficient nor sporty. And Tomobe is quick to admit at least one thing he wishes the CR-Z had: “more horsepower.”

He said he would like a Type R sporty version of the CR-Z someday with a spunkier power-to-weight ratio that lives up to its sporty styling.

Compromise solution

But in the meantime, the CR-Z is an exercise in compromise. It was conceived as a 1.3-liter car for Europe but was given a 1.5-liter engine to appeal to U.S. drivers. It aims to be sporty with a six-speed stick-shift option but also comes in a version with continuously variable transmission to squeeze out extra fuel economy.

The result: a 122-hp package that delivers a 0-to-62-mph time that, at 9.7 seconds, barely edges the Toyota Prius. And fuel economy is only 36/38 mpg, well below the Prius’ 51/48.

The 0-62 time comes from a leaked early edition of the Japanese sales catalog. Honda has dropped all references to it. Indeed, Honda conspicuously omits a 0-60 speed for a car that it touts as sporty.

The CR-Z went on sale in Japan in February and reaches U.S. showrooms this summer.

Honda plans to sell 40,000 to 50,000 CR-Zs a year worldwide, 15,000 in North America. Japan sales are projected at 12,000 a year, and Europe will get the rest.

Tetsuo Iwamura, president of American Honda Motor Co., was skeptical right up until he drove the final prototype.

“He kept saying they don’t need a hybrid,” recalled Tomobe.

“In the American market, people equate hybrids with the Prius,” he said of Iwamura’s cool response. “If the hybrid is sporty, it’s going to confuse the customers and dealers.”

The CR-Z’s fate was put before Takanobu Ito, now president of Honda Motor but then head of automobile operations. “He said, ‘Don’t worry about the States, just keep developing it,’ ” Tomobe said.

While driving early prototypes, Iwamura relentlessly derided the car, Tomobe said. But when he got behind the wheel of the final version, his reaction changed.

Suddenly, the project was a go.

“It’s ironic that the United States was the most vocal in saying they didn’t want the car, but the CR-Z still made its world debut at the Detroit motor show,” Tomobe said.

Tomobe, who cut his teeth as chief engineer on Japanese market projects such as the Mobilio Spike and Elysion minivans, is unapologetic about the CR-Z’s compromises.

“I’m satisfied,” he said. “This is what the future of sports cars will be for Honda. We are not pursuing absolute maximum speed. What we aim for is a car that is exhilarating to drive.”

On paper, the CR-Z’s power may seem lackluster. But sporty handling makes up for it, Tomobe said. The three-mode drive system helps by delivering extra throttle responsiveness.

Drivers can select normal, economy or sporty driving modes. In sporty mode, drivers of the CVT can simulate stepped shifting manually by flipping paddle shifters on the steering wheel.

The CR-Z borrows liberally from its hybrid forerunner, the Insight, which came out last year. It has the same engine room, front flooring, fuel tank and hybrid system. The motor, battery and inverter essentially are the same as the Insight’s, Tomobe said.

Room for improvement

Not only is its engine larger than the Insight’s 1.3-liter, but the CR-Z’s engine has 16 valves instead of the Insight’s eight. This is to help increase power at higher rpm and improve efficiency at lower speeds.

Up to 2,300 rpm, one intake valve per cylinder is closed to limit fuel consumption. Above that, all four valves are working to optimize power.

The CR-Z is also the first Honda hybrid to get a six-speed manual transmission.

Honda already is eyeing improvements. By boosting the storage capacity of the battery and making the motor and inverter smaller and lighter, future generations of the CR-Z should deliver better performance.

Said Tomobe: “There is room for further evolution.”

Critics say Honda could score by offering a gasoline-only CR-Z. But Tomobe said the company has ruled that out. The car’s identity is too closely linked to being a hybrid, he said.

But a Type R racing incarnation is another story. “If that appeals to people and contributes to Honda’s sporty image, we need to consider all options,” Tomobe said, adding that he would like to see an R.

That would require reworking the power-to-weight ratio and boosting the maximum speed. Tomobe said that is still a tall order for the current CR-Z and its eco-friendly mission.

Said Tomobe: “The CR-Z is supposed to be an intelligent sports car.”
Hybrids head-to-head
Specs of Honda and Toyota hybrids
HP Mpg (city/hWY.)
Honda CR-Z 122 36/38 (CVT); 31/37 (manual)
Honda Insight 98 40/43
Honda Civic 110 40/45
Hybrid Toyota Prius 98 51/48
Source: Companies