Daily Edition: Mar. 22, 2006

March 20, 2006

Smart Sale Sidelined

Shareholders are pressing DaimlerChrysler AG's top management about the company's plans for its money-losing small-car unit Smart, and its Maybach superluxury brand. A resolution calling for a full accounting of the company's spending on smart and Maybach could be presented at company's annual shareholders' meeting in Berlin. Meanwhile, the German press is reporting that DaimlerChrysler has terminated its contract with the investment banking firm of Goldman Sachs, which was supposed to screen proposals for smart's assets from outside bidders. Earlier this month, Dieter Zetsche, DaimlerChrysler chief executive officer, said a number of potential bidders had emerged. The Financial Times of London also reported that DaimlerChrysler's plans for selling smart have been put on hold, probably indefinitely. Bodo Uebber, DaimlerChrysler's chief financial officer, said during one appearance this week that as long as smart meets its interim objectives, which include narrowing its losses this year and reaching break-even in 2007, the German automaker will remain committed to restructuring the brand. The restructuring launched last spring has eliminated about 40 percent of smart's employees and delayed indefinitely any plans to bring the smart minicar to the U.S. -Joe Szczesny

 

WJR Auto Report: Isuzu's Changing Fortunes

Following up on my recent report about General Motors' global alliance strategy, Isuzu Motors took exception to comments I made about their financial outlook. Isuzu officials note the Japanese maker posted operating profits in each of the last four fiscal years, including an 87-billion yen operating profit in 2005, and was profitable in the U.S. for the first time since 2000. Now I admit that saying "Isuzu is all but bankrupt" was going too far. Even so, we must also add, Isuzu's model lineup has been shrinking, along with U.S. sales, which fell from over 100,000 at the beginning of the decade to about 12,000 last year. So while Isuzu argues it is in robust health, there have been recent news reports speculating that it may pull out of the U.S. auto market entirely. The company denies that. Meanwhile, other reports speculate that GM will sell off its remaining stake in its long-time Japanese partner. -TCC Team

 

TCC Drives: 2006 Cadillac XLR-V

Bentley LeMans

Bentley LeMans

If there's been any bright spot for troubled General Motors in recent years, it's the nascent revival of the automaker's once-formidable Cadillac division. There was a time, not that many decades ago, when Caddy called the shots in the luxury market, but in recent years, the "Standard to the World" has had to take a back seat to more posh import contenders, like Lexus, Mercedes-Benz, and BMW.

Yet with the introduction of its edgy "Art & Science" styling theme, Cadillac showed that it might be down, but it certainly wasn't out. Though it's by no means a world-beater, the first production model, the CTS sedan, is one of the luxury segment's most distinctive designs. Then there's the angular XLR, the production version of the GM brand's striking Evoq concept roadster.

Cadillac's first hardtop convertible, the XLR was unabashedly aimed at the likes of that roadster benchmark, the Mercedes SL. Now the two-seater is being served up in a more sporting trim. Boasting a big boost in power, along with some exterior and interior refinements, it becomes the most expensive Cadillac in history, planting the flag at precisely $100,000.

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