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I’m sure many of you have seen at least a few of the recent “news” reports that Ford will be selling its Jaguar/Land Rover operations any day now. Potential buyers mentioned (by people who should know MUCH better) have run the gamut from Fiat to Renault to a couple of Asian companies, with a few private equity groups thrown in because the Cerberus-Chrysler deal must be the beginning of a trend. Only a few weeks ago, Automotive News, that renowned and (too) oft-quoted trade weekly, let go with the spectacular revelation that Ford was just about to announce the sale of its Volvo car unit to BMW.
Wherever do they come up with this stuff?
To start with, the sale of Jaguar/Land Rover, or Jaguar alone. Or Land Rover alone or even Volvo would require Ford Motor Company to re-negotiate the conditions of the massive cash loans it took out late last year. Why, you may ask? Put simply, Ford placed its “automotive operations” (as well as a bevy of other assets) up as collateral for the much-need infusion of capital. Admittedly, the company could go to its lenders and revise its loans so the beleaguered automaker could shed one of these units, but said negotiations are rarely quick, difficult to keep quiet and always painful.
But amongst all the chatter about Jag, Land Rover and Volvo’s imminent sale(s), not a word has leaked from the financial community. Strange, isn’t it?
And regarding the acquisition of Volvo by BMW, beyond the obvious issue that Volvo brings no usable asset or technology to the Bavarian automaker, the story is a complete fabrication. It seems the idea got started at Autocar magazine in the UK earlier this year in kind of a “what if” three-liner needed to fill out a column. Within a week or so the story was passing around the European enthusiast publications. The chatter got loud enough for numerous people at BMW (execs and PR types alike) to deny it. This only created a buzz amongst a few key European business and financial rags. The result was the astonishing transformation of filler postulation into NEWS. Not it’s not strange, it is sad. Very, very sad.

On this side of the Atlantic, much of the misleading reportage of industry innuendo and the masturbatory fantasies of Wall Street-based business morons as actual news has been the product of the aforementioned industry weekly, Automotive News.
Remember the astonishing “news” this past February that the outright acquisition of the Chrysler Group from DaimlerChrysler by General Motors was all but a done deal? The publication that broke that earth-shattering item was none other than Automotive News. “GM in talks to buy Chrysler,” was the headline. The magazine sited ethereal “company sources” as saying talks were in “full swing but still at an early stage.” A Reuters item that went out at 6:01PM on Friday the 16 of February was especially elliptical:
“The talks to buy Chrysler, described by a source familiar with the situation as exploratory, were first reported on Friday by the trade journal Automotive News.
Automotive News, citing unnamed sources in Germany and the United States, said the companies were engaged in high-level talks about GM buying Chrysler Group — which sells Chrysler, Dodge and Jeep vehicles — in its entirety.
One source told Reuters that GM was in preliminary talks to buy Chrysler, but added it was questionable whether GM would want Chrysler’s finance business, having sold its own finance arm, GMAC, last year.
A second source said talks were ongoing between the pair over a strategic car alliance but that source had no knowledge of any further talks.”
Multiple enigmatic sources on two continents postulated what could be construed as contradictory events, and this doesn’t put up a red flag to any of the reporters involved in getting this piece out at either Automotive News or Reuters?
The acquisition of Chrysler by GM would only compound GM’s devastating health and pension legacy costs as well as give the company even more excess manufacturing capacity. Mention of this, or of the huge product overlap of the two companies’ product portfolios was nowhere to be seen in the Automotive News piece and was buried after the eleventh paragraph of the Reuters report.
But the rip-and-read style of reporting that has long been the mainstay of rural radio stations is now rampant in the so-called mainstream media. And the next day the Washington Post’s sometime self-delusional but always amusing staff writer Sholnn Freeman added fuel to the fire. This time by imagining that Renault-Nissan boss Carlos Ghosn could use Chrysler. In this case, Freeman’s writing is as fascinating as that of (science fiction writer) Robert A. Heinlein. To wit:
“Shares of DaimlerChrysler climbed yesterday after media reports that General Motors was in talks to buy the German firm’s Chrysler division.
Chrysler officials in Germany played down the reports, saying the primary focus now for Chrysler was a restructuring aimed at returning it to profitability. And U.S. industry executives struggled yesterday to assess how GM would benefit from an alliance with Chrysler. GM is in the process of shrinking its operations in an attempt to increase its profit.
Other potential Chrysler suitors include European or Asian carmakers seeking a bigger foothold in North America. Renault-Nissan Motor chief executive Carlos Ghosn, who unsuccessfully sought to enter into an alliance with General Motors last year, has said he is open to new partners. He has not, however, publicly expressed interest in Chrysler.
Adding Chrysler to his alliance could help Ghosn build up his clout in the United States, the world’s largest and most profitable auto market. Another key player is China’s Chery Automotive, which has been trying to establish a presence here over the past few years.”
And this piece is just about as accurate as the writings of Mr. Heinlein as well.
A story born of sloppy reporting and near-hallucinatory invention is just like a bad lunch – you can’t keep either down. And so it was with the GM-Chrysler novella. Nine days after the Washington Post story broke, Automotive News scribes Jamie LaReau and David Barkholz let loose with “news” that GM was trailing in the bidding for Chrysler. In their story, the journalists sited two phantom sources that DaimlerChrysler thought GM’s bid was too low. What bid? To their credit, Ms. LaReau and Mr. Barkholz did make mention of the company that actually did make a bid (the winning bid, as it turns out) for the Chrysler Group:
“According to published reports, the lead bidders appear to be two private equity funds – Cerberus Capital Management and Blackstone Group – and Canadian supplier Magna International Inc.
It’s not clear whether any of the three are working together, and none of the three would comment last week.”
Tough to miss that the pair of writers depended on the leg work of some other journalists for the names of the equity funds.
Bottom line, this isn’t news. A couple of years ago, Automotive News started an online version of its printed weekly. In 2006 the publication began issuing news blasts on an “as required” basis. This is good. Very good. And very much journalism in the 21st century style. But the “as required” concept has become lost. The drivel that is passed off as breaking news in some of the blasts is beyond laughable. There seems to be a “print anything, they won’t remember it next week” mentality in play. I am overcome with the uneasy feeling that Publisher and Editor-in-Chief Keith Crain fancies himself a kind of trade publication William Randolph Hearst. The turn-of-the-century newspaper mogul sent reporters and corespondents to Cuba to capture stories of Cuban insurrection. When his artist corespondent, Frederick S. Remington, arrived in Cuba to cover the expected Spanish-American conflict only to find no visible signs of war he was said to have cabled Hearst for permission to return to the United States. The purported response from Mr. Hearst was a succinct fifteen word telegram:

“Remington, Havana: Please remain. You furnish the pictures, and I’ll furnish the war. W. R. Hearst.”
I trust it need not be noted that Mr. Crain is no William Randolph Hearst. He’s not even Charles Foster Kane.
As the perceived need to publish “anything that can be construed as news” spreads to blogs and websites all over the net, something is being lost. Something that is increasingly important as the mind-numbing days of newsoid overload pass.
The truth.