Back when fuel was below $3 a gallon, renting a car was like playing Wheel of Fortune. Though you usually got the car you rented, once in awhile, a big prize like an SUV or a Cadillac DeVille came up. ABC News reports that rental customers are now avoiding upgrades to bigger cars and SUVs because of high fuel prices. In turn, they've created a shortage of rental compacts, forcing rental companies to respond with more aggressive tactics to "upgrade" the customer to bigger and more fuel-thirsty options. The oversupply's sending SUVs daily rental rates downward, to the point where renting an SUV is becoming  cheaper than renting a compact. As ABC notes: "an Internet search by ABC News this week found Budget Rent A Car offering a daily rental of an intermediate SUV from Newark airport in New Jersey for $66. An economy vehicle was $76, and a compact car cost $77." [NB: TTAC could not duplicate these deals on AVIS.com or Nationalcar.com.] One frequent renter has a word of advise for rental car companies: deal. "[They] need to anticipate what's coming. If Avis came up tomorrow and said, 'Our vehicles are fuel-efficient vehicles,' they'd see a surge in people wanting to rent from Avis." Oops! Looks like Hertz's Green Collection PR team dropped the ball. 

The only thing worse than losing your job is having to sit around and wait to lose your job. Ask Ford's white collar workers. The Blue Oval Boyz have already announced plans to cut the salaried workforce by 15 percent; in some areas like product development it's as high as 20 percent. With the bulk of the cuts coming in late July, morale and productivity are lower than the chances that CEO Alan Mulally will earn less than $20m in any given year. The Detroit News reports "work has ground to a near-halt in some offices as workers fret about their futures and spend time browsing job postings on the Internet." (Hi guys!) Even those who aren't scheduled for layoffs are looking elsewhere for employment, not knowing if they may be shit-canned in the next round of cut-backs. Does it make sense to cut product developers and engineers while struggling to get new products to market? Oh… wait. They'll just import designs from Europe three years too late or let Mazda handle it. In fact, it looks like they'll do anything they can to save a buck as long as it doesn't interfere with executives' mega-salaries, perks and golden parachutes.

You may recall the Plastech debacle. Chrysler's interior supplier got bailouts from ChryCo, then filed for Chapter 11. ChryCo tried to swoop down and take the tooling. A federal judge said no. Since then, the supplier's been sold off. And much to somebody's chagrin, the owner of the mismanaged parts maker has pocketed, wait for it, $12m for running the company into the ground. And if that's not bad enough, and I say it is, Crain's Business Detroit reveals that the federal judge overseeing the break-up allowed Plastech to hide Julie Brown's compensation from public view. And no wonder. "Those documents show that Julie Brown's husband, three brothers, two sisters-in-law, a sister, a cousin and a nephew were on the payroll to the tune of about $6 million a year. Of that, $2.25 million was paid to Jim Brown, Julie Brown's husband. From other documents, it appears that Brown's personal driver, cook and two housekeepers were paid by the company." Strangely, Crain's sense of righteous indignation also files for bankruptcy. "Employing family members is no crime. Trying to keep how many relatives and what they were paid from the public suggests that Plastech's owner thought she had something to hide. If each family member performed his or her duties well, what's the problem? Surely the compensation is not the cause of the company's overall financial problems." No, of course not. Nor is it any indication that the company was poorly run. At all. 

Back in the 70's former TTAC columnist Brock Yates coined the term Grosse Point Myopia: the tendency of Detroit's execs to use each other for their frame of reference. [Our own Andrew Dederer revisited GPM in October 2006.] And now Ford's Presidente de las Americas, Mark Fields, evokes the concept with his insistence that doing better than before is as good as doing well. Or being prepared. But you'd expect these sort of revisionist weasel words in an article by The Detroit News on the D2.8's troubles the day before the June sales numbers drop (as in off a cliff). Did you know that after last May's numbers, Ford and GM "executives were alarmed?" Yes, "eventually [eventually?] they made almost desperate decisions that will cost thousands of jobs, change the vehicles people drive and determine whether their businesses survive." And check this: Mike DiGiovanni, GM's executive director of global market and industry analysis, told scribe Tom Krishner "oil prices in February began to rise, still not to an alarming level because they were consistent with previous seasonal spikes. Gasoline was still at a nationwide average of $3.03 per gallon. In March, though, pickups' share of the market dove to just 11.6 percent and gas rose to $3.24. 'That's when I said 'Red Alert,' Digiovanni remembered. 'We're worried.'" To which Krishner adds "Even critics say it would have been nearly impossible for the automakers to predict the 74-cent-per-gallon spike in regular gas prices between February and May." This is going to be one Hell of a wake-up call. Or, even more worryingly, not. 

I drove the Audi TT 2.0T Convertible prepared to hate it. Its wrong-wheel-drive, mandatory two-pedal transmission, extra-chunky-style curb weight and econobox-based platform violates all that I hold sacred in a two-seat drop top. Similar formulas have belched forth such embarrassments as Mercury’s legendary (for all the wrong reasons) Capri. But the topless TT is no Capri. And thank Gott for that.

We've been sounding the alarm on Detroit's liquidity "challenges" even before the automaker's began their most recent "turnaround" efforts. Before I relate Automotive News' [sub] tardy take on the situation, keep in mind that Ford has abandoned its promised "return to profitability" target (and not set a new one), GM never had a publicly pronounced plan to get back in the black (how great is that?). And Chrysler's gone into radio silence since its private equity owners bought themselves a multi-billion dollar passel of trouble. And don't forget Fitch's Ratings has better access to corporate info than Automotive News; they've downgraded all three automakers and put them on negative credit watch. Alright then… GM "will burn through about $1 billion a month this year and $6.3 billion next year, says Patrick Archambault, an analyst for the investment bank Goldman Sachs Group Inc. That would leave an anemic $8.7 billion in cash by the end of 2009 unless GM dumps assets or adds new debt, he said." Ford "is in better shape — about $29 billion in cash and $11 billion available through credit lines. Moody's Investor Service says Ford could exceed a two-year total cash burn of $14 billion by the end of 2009." Chrysler "started 2008 with slightly less than $10 billion in cash. On June 18, Bloomberg News reported that Chrysler will burn through $2.5 billion this year and would end the year with $7.7 billion in cash." We're thinking they're all low-balling. You? 

In today's Wall Street Journal, Joseph White proposes Three Vehicles Detroit Should Build. Y1) a seven-passenger vehicle that gets 30mpg highway, 2) a midsize sedan that gets 40mpg highway that doesn't cost much more than a Malibu or Camry, and 3) a pickup truck large enough to do real work and comes close to 30mpg highway. Worthy goals, indeed. But, Mr. White, may we suggest looking at what the competition already has on the market: 1) no current US market seven passenger gas-powered vehicle gets close to 30mpg highway. [Note: such vehicles exist overseas - assuming you don't look like the humans in WALL-E] 2) The Toyota Prius is the only midsize car that gets 40+ mpg on the highway, never mind that the Cobalt XFE can't hit that number on the side of a barn despite its stick, and 3) if someone builds it (a compact diesel pickup), will they come? What of high diesel prices and competition? And what if ALL of The Big 2.8 builds these self-same vehicles? Anyway, the D2.8 have enough to worry about just trying to survive the next year, much less leapfrogging the competition in the fuel economy department.  Of course, there's always the option of installing much smaller engines and asking customers to put up with 0 – 60 times up to 20 seconds, just like in the 1970's. 

You want evidence that GM takes TTAC seriously? I got nothing. You want proof that GM should lend us an ear, or another indication that the American automaker's just too damn slow? No problem. Back in April, Edward Niedermeyer flagged the fact that Chevrolet was [all too quietly] selling a higher-mileage Cobalt XFE with re-jigged gearing and low-resistance tires. "These are exactly the kind of common-sense efficiency improvements Chevy (et al) should spread across their lineup," Edward opined. Yes, the Detroit Free Press reports that "thanks to quick action by GM's engineering and marketing teams," the Cobalt's twin-under-the-skin Pontiac G5 also gets the mods and the new badge. Quick? Yes! Quick! "We saw fuel prices rising early this year, and rather than sitting on the sidelines in a Motown hole-in-the-wall knocking-back boilermakers worrying, we did something," Chevrolet spokesman Terry Rhadigan boasts. Unfortunately, it doesn't look like GM's going promote these "new" cars; Lordstown's maxxed out as it is. And GM's hasn't quite committed to the XFE concept. "Chevrolet may apply the strategy — and the XFE badge — to other model lines. Other GM divisions may do the same, although they might not use the same XFE badge." Hey, what's the hurry?

For the third time, a dramatic oil price spike has thrown the auto industry a curve ball. And once again, after years of supersizing, manufacturers are lacking the right-sized, economical products for which the market is desperate. Instead of spending three to five years developing new cars from scratch, it’s time to dust off the best from the past and put them back into production. An air bag here and some updated engines and technology there, and these seven classics are ready to save the day in each of the major categories:

If a gathering of crows is called a "murder," what do you call ten New York Times Op Ed pieces on high gas prices? A derrick of… no, I won't say it. Luckily, the Times only provides McNuggets for their "Is Your Tank Half Empty or Half Full?" editorial agglomeration. So… Pajama Life: Nicole Belson Goluboff, author of “The Law of Telecommuting,” says telecommuting rocks! Fuel for Inequality: Robert R. Reich says poor people are harder hit by rising gas prices than rich people. What the Green Bubble Will Leave Behind: Daniel Gross looks forward to driving a plug-in electric hybrid charged by a wind mill in his driveway. Ghosts of the Cul de Sac: Allison Arieff says high gas prices will kill the suburbs (so much for Gross' driveway). Goodbye to the Great American Road Trip: Michael Paterniti says fuck that shit. Tax Brakes: tax the Hell out of driving. I mean, the feds should give tax credits for NOT driving. Be the Prius: Tom Vanderbilt recommends hyper-miling. Or is that eco-driving? Psychoanalysis by the Gallon: Viennese scribe Annaliese Rohrer is, gasp!, on the subway "more often than I normally would choose to be." The Light Stuff: Jamie Lincoln Kitman (a car guy!) believes Detroit should be, sorry, build, smaller cars. Hair-Raiser: Karen Karbo loads us with this jewel: "Until [bicycle] helmet hair becomes universally chic, we will never be free of our dependency on mom chauffeuring us to the mall." (Her mom chauffeurs her to the mall?) So, what did we learn?