Autoblog

Cerberus Capital Management shot off a nine-page letter to investors outlining ways that Chrysler could sink, while also pointing out that they believe Chrysler's on the track for success. Some of the possible failure scenarios include a nasty recession, an extreme slowdown in the car market, or a further credit downturn. Credit is already looking green around the gills, and the potential for a widespread domino effect that starts with an implosion of the teetering mortgage business would be catastrophic for Chrysler Financial and GMAC, of which Cerberus owns 51 percent. As easy mortgages and equity go, so goes willy-nilly new car purchasing, and we're probably already seeing the results of that adjustment. Cerberus believes that it can weather a mild credit downturn, and even a mild recession, just fine.

One way to attain success is to declare it, and changing the definition doesn't hurt, either. Cerberus optimistically declares that there's no need to be heroes to earn a good return on their investment. It sounds a little bit like they're saying it's okay to tread water. Stating that it's not necessary to build Chrysler up, even though that's the underlying hope, Cerberus thinks that just hanging in there should be good enough to earn a return. All of Chrysler's employees must feel great knowing that Bob Nardelli, Jim Press, and Tom LaSorda can essentially just keep the company coasting along until Cerberus sells Chrysler off so it can collect that mythical return. Chrysler's performance is so far outpacing expectations, and the company does have cash on hand. Those are actual, concrete good signs that Chrysler could yet emerge from its chrysalis.

[Source: Detroit News]

click above to view more images of the Mercedes-Benz R-Class

That the R-Class has not been the most successful vehicle in the history of Mercedes-Benz is no big secret, but after staunchly espousing its virtues for year, the automaker has finally admitted it. And as any recovering addict could tell you, admitting you have a problem is the first step on the long road to recovery.

Mercedes had pegged production of the crossover at its Vance, Alabama, plant at 50,000 units annually, with half of that staying in the United States. Last year, however, American dealerships sold only 18,000 units. According to Daimler CEO Dieter Zetsche, the R-Class "has definitely not lived up to our original plans."

Mercedes is planning a replacement for R-Class, and while it could retain the same big CUV/wagon set-up, the next R is more likely to take another format altogether. Mercedes biggest competitor at BMW, meanwhile, is evidently thinking otherwise with the X6 crossover it just unveiled yesterday.

[Source: Automotive News – sub. req'd]

Not long after announcing the largest vehicle recall in Chinese history, Honda announced today that it won't be leaving the U.S. out of its recall roundup. The Japanese automaker revealed a new recall for the United States that affects 165,000 vehicles that could develop engine problems from a sealer material that may leak onto wires in the engine and cause them to snap. Multiple complaints about the problem have been filed at Honda HQ, though none have led to crashes or injuries.

The affected vehicles include the 2005 Acura RL, TL and TSX, the entire 2005 Honda Accord lineup (include the Accord Hybrid), 2005 Honda Odyssey and 2006 Honda Ridgeline. There are other recalls being announced in various markets around the world for the same problem, but Honda declined to reveal how large the scope of this recall is in raw numbers. Clearly, though, this is the same issue that sparked the giant recall in China. So, in total, we know this engine problem accounts for a recall affecting at least 693,406 vehicles wordwide, but likely more.

If you think your vehicle is affected, you can call Honda at (800) 999-1009 for more information.

[Source: Detroit News]

We're getting mixed signals from Ford. One week ago the automaker announced it was distributing bonuses to every single one of its salaried and hourly workers, just to say thanks for helping the company reduce costs, improve quality and reduce the ranks. Today we learn that Ford President of the Americas Mark Fields has told his workforce in a weekly webcast that the company earned poor marks on its own internal report card. The poor marks resulted from missing sales targets and not cutting material costs enough in February. We were under the impression that successful cost cutting was one of the reasons for paying out at least $36 million dollars in bonuses to its workers.

We made the argument last week, and again in this week's podcasts, that we bet many Ford workers would much rather have their bonus money go back into the company to ensure all the right moves are made during these uncertain times and their jobs remain secure. This seems even more evident today in light of Ford's failing to meet its own targets for February. Those many millions could pay for the next niche vehicle that sparks a renaissance, or any number of things that could help save the company. Heck, it could pay for a Taurus SHO!

[Source: Detroit Free Press]