Korea's Ssangyong Runs Out Of Cash, Chinese Won’t Bail Them Out [Carpocalypse Now]

Korean automaker Ssangyong is straight broke; it’s not even able to pay its 8,000 employees for the month of December. Parent company Shanghai Automotive’s response? Get bent.

Ssangyong is the fourth largest Korean automaker and has recently broken into the European market, first with the Musso SUV and lately with the much more attractive Rexton. Now it's $75 million in debt.

“Due to lack of operating funds for December, it is impossible for the company to pay salaries any longer,” the company announced to workers on Friday. Domestic Ssangyong sales have fallen by more than a third in 2008, forcing it to close 60 dealers.

Shanghai Automotive Industry Corporation (SAIC), which acquired 51% in 2004, has refused Ssangyong’s requests for emergency funds. The Korean company now plans to hold a protest rally against SAIC. Koreans vs. Chinese? What is this — 1950 all over again? [via Autocar]

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White House "Looking At All Options," Toyota Stock Drops 10%, Honda Cuts Production [Carpocalypse Now]

The Carpocalypse draws nigh after Senate Republicans lanced last night's bailout. In response, the White House now says "all options are on the table" and Toyota's scared after its stock drops 10%.

The S&P said a month ago that if the credit crunch wasn't taken care of, by 2009 the world would be facing global automaker liquidation. That's what we call the Carpocalypse and it's getting much closer to reality after Senate Republicans killed the House bailout bill without brokering a compromise, hung up on an attempt to strong-arm the UAW into a wage reduction for current workers that apparently isn't factually based.

Meanwhile, Toyota poised for its first U.S. sales decline in 13 years, canceled its 2009 annual dealer meeting in Las Vegas to trim expenses as consumer demand for new cars plummets. Additionally, the Japanese automaker released a statement saying a bankruptcy among the not-so-Big Three would "exacerbate an already difficult environment" for itself and the industry as a whole. On those comments, and thanks to the Senate Republicans, shares were off 10% in Nikkei trading today.

In response, the White House just moments ago claimed "all options are on the table" including, apparently, looking to breaking off a chunk of the $700 billion in TARP financing set aside for the financial industry. Toyota stock recovered after this news, down now just over 1.5%.

Fears of a bankruptcy of any of the not-so-Big Three also hit Honda today, who we just heard will now be cutting output in North America by 119,000 between now and the end of March at plants in Alliston, Ont., Ohio, Alabama and a new factory in Indiana that began producing cars just last month.. Run for the hills, folks!

[via MSN, Globe and Mail]

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Map Of Every Domestic Automaker Manufacturing Site Reveals The Extent Of The Carpocalypse [What Happens If The Not-So-Big Three Fail]

People say "Detroit" deserves to fail. Maybe, but as you can tell by the map below of every manufacturing facility from the domestic automakers, they'll take pretty much the entire Midwest with 'em.

Since it seems like half of the punditocracy, Republicans in Congress and every anti-car hippie with a blog seems to be interested, even giddy, at the prospect of a couple of the not-so-Big Three going under, we thought we'd try to put a little perspective on just what that means. It's easy for people to say "Detroit" deserves to fail, but it's not really just Detroit that would fail, it's pretty much the entire Midwest. We've put together a Google Maps overlay of all US manufacturing facilities currently in operation by one of the big three. Peruse at your leisure, then imagine all of those factories across the US empty and silent.

View Larger Map

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The Case For GM CEO Rick Wagoner [Carpocalypse Now]

You may have seen Sen. Chris Dodd on "Meet The Press" this weekend tell Tom Brokaw GM CEO Rick Wagoner "has to move on." That's a terrible idea.

Sen. Chris Dodd (D-Apparently Knows How To Make Cars Better Than Anyone) told Tom Brokaw on NBC's "Meet The Press" yesterday GM CEO Rick Wagoner "has to move on" and GM has "to consider new leadership" as part of a government-run restructuring. Given GM's lost billions of dollars and double digit market share over Wagoner's reign of terror at the General — why's that such a bad idea?

While we've been a vocal critic of GM's glacial restructuring effort, we've got to say the automaker probably should stick with the girl they brought with 'em to the ball — no matter how ugly. Mostly because we can't name anyone better who'd understand the product and the bureaucracy of the General. Yes, the very bureaucracy Wagoner never changed that made the automaker move so slowly to make the necessary changes in product to turn the ship around. But to bring in someone completely new to figure out that bureaucracy takes time GM just doesn't have without tens of billions more in public monies. While Ford CEO Alan Mulally seems like he's been able to do it at the big blue oval, it's taken him two years to get there. We're not even sure the General's got more than two months left in 'em.

What this automaker needs isn't a change in leadership so much as it needs an external force moving the current leadership to change quickly. "Slick" Rick Wagoner and Fritz "Big Money Grip" Henderson need to be pushed and pushed hard.

We all saw in Chrysler's ownership by Cerberus what happens when an outside entity with no knowledge of the complexities of the auto industry completely takes over an automaker. Frankly, we'd rather not see that happen with the other two not-so-Big Three. Instead, a system merging product and industry know-how with some kind of public oversight could come up with an understanding of the product necessary to make that change happen and how to make that product a reality.

Whether Nissan-Renault CEO Carlos Ghosn or Kirk Kerkorian's aborted attempt at making a quick buck, we've seen GM move quickly when some kind of external disruptor's been there to force change with the current leadership mix. If structured with the right level of power, that new external disruptor could be the third-party oversight board being recommended to oversee the public's investment in GM. Whatever the structural addition, there needs to be something forcing the leadership team at GM to move faster. And if then they're not moving fast enough, let that third-party board make the necessary changes, including lopping off Wagoner's head if need be.

Congress shouldn't fire Rick Wagoner as some kind of knee-jerk reaction designed to prove to their constituents the bridge loans for the not-so-Big Three aren't some kind of AIG-like boondoggle. But don't allow him to resume business as usual post bridge loan — hold Wagoner's feet to the fire until the General succeeds (if it's able to).

So we hate to say it but... Rick, would you like this dance? Just don this paper bag first, would you?

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CNBC "Saving General Motors" Yet Again [Carpocalypse Now]

The first time CNBC tried "Saving GM" it didn't so much work. Now they're again taking us "Inside The Crisis" Monday night at 10 PM. We hope it doesn't feature Phil LeBeau giving mouth-to-mouth resuscitation to Rick Wagoner. [CNBC]

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Ford Officially Looking To Sell Volvo [Carpocalypse Now]

Ford announced today it is officially looking to sell Volvo, the premium Swedish automaker that the company acquired in 1999 and made an important part of its Premier Auto Group (PAG). Oh what a difference a decade makes. Ford paid $6.45 billion in 1999 dollars for the automaker in a fierce bidding war with Volkswagen AG and Fiat. In preparation for a sale Volvo will be made more of a stand-alone company. Volvo was the last of the PAG brands left after Land Rover/Jaguar were sold to Tata and Aston Martin was sold to an investment firm. Why sell the company? In the midst of a bad market the company's slumping sales are a thumb on Ford's already heavy scales. Who would buy Volvo? Why not Volkswagen or Fiat? Both companies could pick it up for an amount we assume is less than $6.45 billion. Press release below the jump.

FORD MOTOR COMPANY ANNOUNCES IT WILL RE-EVALUATE STRATEGIC OPTIONS FOR VOLVO CAR CORPORATION

DEARBORN, Mich., Dec. 1, 2008 – Ford Motor Company [NYSE: F] announced today it will re-evaluate strategic options for Volvo Car Corporation, including the possible sale of the Sweden-based premium automaker.

Ford said the decision to re-evaluate strategic options for Volvo comes in response to the significant decline in the global auto industry particularly in the past three months and the severe economic instability worldwide. The strategic review of Volvo is in line with a broad range of actions Ford is taking to strengthen its balance sheet and ensure it has the resources to implement its product-led transformation plan.

“Given the unprecedented external challenges facing Ford and the entire industry, it is prudent for Ford to evaluate options for Volvo as we implement our ONE Ford plan,” said Ford President and CEO Alan Mulally. “Volvo is a strong global brand with a proud heritage of safety and environmental responsibility and has launched an aggressive plan to right-size its operations and improve its financial results. As we conduct this review, we are committed to making the best decision for both Ford and Volvo going forward.”

Ford said the review likely will take several months to complete. In the meantime, Ford will continue working closely with Volvo as it implements its restructuring plan under CEO Stephen Odell, who was appointed to lead Volvo earlier this year.

At the same time, Ford and Volvo will continue to put in place processes that allow Volvo to operate on a more stand-alone basis in the absence of the Premier Automotive Group structure, an effort which began in November 2007 following a previous review by Ford of strategic options for Volvo.

“Outstanding safety, an increased focus on environmentally friendly vehicles and contemporary Scandinavian design will continue to be the foundation upon which we will build a strong Volvo business for the future.” Odell said. “We intend to build upon our strong brand heritage and to appeal to our global customers with vehicles like the new XC60 – the safest car Volvo has ever built. Volvo also will introduce seven low-emission models in 2009, giving us the best environmental product range in the premium segment.

“We have a strong brand presence in Europe, North America and the Asia Pacific region, and are growing in key markets such as China and Russia, where we are the leading premium brand.”

Ford Motor Company, a global automotive industry leader based in Dearborn, Michigan, United States, manufactures or distributes automobiles in 200 markets across six continents. With about 224,000 employees and about 90 plants worldwide, the company’s core and affiliated automotive brands include Ford, Lincoln, Mercury, Volvo and Mazda. The company provides financial services through Ford Motor Credit Company. For more information regarding Ford’s products, please visit www.ford.com.

[Source: Ford]

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