About James Bryant

As the year winds down it seems Tata Motors has taken the inside track on Ford’s widely publicized sale of its problem children, Jaguar and Land Rover.

Representatives of Unite, England’s largest manufacturing labor union, are reported to have approved Tata Motors’ bid to acquire the two storied British brands after Tata and two other main bidders (reported to be Jacques Nasser’s JPMorgan Chase-affiliated One Equity Partners and fellow Indian motor company Mahindra & Mahindra and its partner, Apollo Management)  rolled out their respective schemes to union representatives last week. The union wants two things: security for the 40,000 some-odd UK jobs at stake, and Ford to take an equity stake in certain suppliers that outfit Jaguar and Land Rover plants in the UK — which amounts to job guarantees for workers at those plants.

The deal attempts to meld two seemingly at-odds agendas: globalization and protectionism. Tata gets to expand its geographic reach with two well-known brands (against the better judgment of another Bizmology blogger) while UK workers get to keep a few, increasingly rare, Western manufacturing jobs. Problem is, these were the same opposed but complementary forces that brought the two British brands under Ford’s control in the first place — and we all know how well that went.

 The good news for Tata is, it seems, that the company will get a great deal on the two brands. Ford paid $2.5 billion for Jag back in 1989; it paid $2.57 billion for Land Rover two years later. Merrill Lynch has estimated Jaguar and Land Rover to fetch a Red Tag Sale price of $1.3 to $1.5 billion. Does that include the TruCoat?

Car markets in Western Europe and North America (and to some extent Japan) are not what they used to be. They are “stagnant” and have been for some time. Automakers are looking at developing countries for 21^st century growth, and not surprisingly, the average driver in a developing nation is priced out of the Hummer and Ford F-150 markets.

Renault has been addressing the trend since 2004 when it launched the bare bones Logan — a cheap ride with a starting, shock-proof sticker price of about $7,500. Trouble is a rival is emerging in India that is poised to make $7,500 look extravagant. Tata Motors plans to debut its $2,500 car in January at the New Delhi Auto Expo, and put the cars up for sale later in 2008.

Renault and Nissan CEO Carlos Ghosn has been scoping out the operations of various potential Indian partners to help it solve the $3,000 price tag riddle. So far Ghosn has checked out Ashok Leyland and Bajaj Auto in hopes of cooking up a deal. J.D. Power and Associates has predicted that India will surpass China as the fastest-growing car market within the next five years. India has a pool of 60 million scooter and motorcycle riders who currently are priced out of car ownership. A car with a price of $3,000 or less would be nothing short of revolutionary for the average Indian motorist. Tata also plans to market its $2,500 car in Latin America, where it already has a distribution deal with Fiat, as well as Africa and the Middle East.

Ghosn is racing the clock. He wants to ink a deal so he can tout it at the New Delhi Auto Expo that is just a couple of short months away. If he can kill the costs that have thus far stymied the debut of a reliable $2,500 car, the Japanese may make a movie based on Ghosn’s comic book. And who knows? If fears of a US recession prove prophetic, Ghosn’s plan to bring a $5,000 version of the cheap car to Western markets could come just in time.

Here at Hoover’s more than a few editors have been waiting on pins and needles for DaimlerChrysler to pull the trigger on its inevitable name change in the wake of selling Chrysler to Cerberus Capital Management back in August. It’s almost certainly going to be Daimler AG, but it seems the Germans just can’t resist a good fight.

Why do Hoover’s editors care? The impact of that name change on our database is huge. In most cases, every place the word DaimlerChrysler appears on Hoover’s will have to be changed manually to whatever the dummkopfs in Stuttgart finally decide on. At this point I feel like I’m still wearing a stinky cast even though my broken arm has been healed for two months.

The decision process in Germany is proceeding with a precision and order that makes a Marx Brothers movie look like the changing of the guard at Lenin’s tomb.

The fight stems from the Germans’ strong sense of history. Evidently, two glorified German grease monkeys, Carl Friedrich Benz and Gottlieb Daimler, merged their respective fledgling car companies to form Daimler-Benz in 1926.

The current plan on the table is to name the company Daimler AG, which will be up for a shareholder vote Thursday. Problem is, some shareholders be old-school, yo. And thay’s representin’ for Carl Friedrich Benz. “Leave out Benz? Why you dissin?”

Some shareholders are positing alternative names: Daimler-Benz AG, Benz-Daimler AG, or Benz AG. One shareholder in particular, Wilm Diedrich Mueller, is leaning toward the last option. He said “The word Benz should be just as clearly connected with the present corporation … as the word Daimler, but the word Benz has the unbeatable advantage compared with the word Daimler that it is shorter and consists of half as many syllables.” So, for the first time in history, a German is worried about a German word having too many syllables! As the Dude would say, Wilm is “into the whole brevity thing.”

In another wrinkle Ford and its tired Jaguar brand are mired in this mess. By a weird twist of licensing, Jag owns some rights to the Daimler name and uses it on über-high-end rides for people like Queen Elizabeth II and, I would assume, Posh Spice. But Ford is selling Jaguar — to who is not at all clear, although there is a quirky batch of front runners, any one of which might find itself involved in the what-to-rename-DaimlerChrysler farce.

Still want Jag, Tata?

Last weekend I spent 4 hours sitting in a car stereo installation place (that for legal reasons shall go unnamed) listening to the most repetitive, annoying, almost seizure-inducing techno music man has ever devised while waiting to have my truck made iPod compatible. That experience was like catching a 5-pound bass while winning the lottery compared to the thought of blogging about the UAW strike on GM. But you buy the ticket, take the ride — as the Good Doctor used to say.

The nail-biter went on for a full two days before a deal was reached, ending the first UAW strike against GM in 37 years. Hoover’s Tim Walker very ably covered the nuts and bolts of the deal, and his analysis is spot-on. But I could not agree less with Tim about wanting to see a longer strike. What’s the matter, Tim? Don’t you have enough to do over there?

The journalistic side of me would have liked the dispute to be settled in about five minutes with GM CEO Rick Wagoner challenging UAW president Ron Gettelfinger to a bout of Rock’em Sock’em Robots — winner take all (with the theme music from Over the Top playing in the background, of course).

As the Automotive Guy at Hoover’s, if there’s anything more boring and tedious than a Detroit-based automaker detailing its latest restructuring plan, it’s talk about strikes. Sure. Strikes seem exciting. “Oh, no! How will we maintain the flow of Chevy Tahoes? We’re all gonna die!” Calm down, people. The main story here is workers want to keep their high-paying jobs, their job security, and their state-of-the-art health care and retirement benefits. GM wants to still exist in 10 years. So who has who in the proverbial headlock? As determined as UAW Local 652 President Chris “Tiny” Sherwood looks*, my money’s on General Motors.

*Props to Harold Foster at Lansing Labor News (pdf) for the excellent pic of Tiny!

 UPDATE — Late in the game Monday the Teamsters union said they will not cross UAW picket lines. GM has a backlog of cars so a UAW work stoppage is scary but not terrifying. However, the idea of the Teamsters refusing to drive finished cars to dealer lots is terrifying. Maybe we’re all gonna die after all!