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Posts By: Jehovah Johnson
Ed Niedermeyer is AWOL collecting bribes with hermaphrodite LeMons Judge Murilee Martin somewhere in – aha! – San Francisco. So Sajeev Mehta (bless his heart, why is he not judging?) tracked down our old friend Jehovah Johnson to write some fiction. Or was it the truth?
This is a story related to Steve Lang’s Hammer Time series. The following is an excerpt of something I wrote chronicling my two day tenure at an auction house down in the city. I’ve been in sales, particularly the auto industry, seemingly forever, so it’s not like I didn’t know what I was getting into. Several people thought this was creatively written, so I’m submitting it to you guys; post it, laugh at it, whatever you wish. Your website is great. Thanks and pull up a chair…
So I get there on Day 1, pumped – there’s about 500 cars outside, in various states of disrepair and readiness for sale but nevertheless. Go in, introduce myself, etc etc. I’ve officially arrived and am ready to solve your problems was the general tone. Met everyone, typical car environment segregation – males running the place/in sales with some excellent females on the phones and handling the accounting/secretarial – some serious talent was present in the back office. This is going to be fun, I thought. (Read More…)
First impressions last. Except when they don’t. A few years back, I didn’t think the new-generation Accord was all that special. The enlarged Honda mid-sizer did the monkey-making thing; ascending the sales charts to become America’s top-selling mid-size family sedan. My first impression of Kia’s all-new Forte: it’s a hit. The Kia Forte’s a cheap (as in inexpensive), safe, somewhat stylish, fuel-efficient sedan that transports up to four adults in perfect comfort, without driving like a penalty box. In fact, this car is good enough that it could be a turnaround product for Kia, which has struggled to establish its place on the American automotive scene. But will it? What am I, psychic?
The most definitive difference between Chrysler’s swift conversion from Old to New Chrysler and the General’s “reinvention”: the element of surprise. Or lack thereof. The General’s list of creditors on GM’s court filing (dealers, parts manufactures, advertising media, bondholders, et al.) are all painfully aware of what happens when “The Fix” is in. They now know what it means when The President of the United States promises the public that “we will get this done in a swift and expeditious manner.” Forewarned is forearmed. And there’s another crucial difference between Fiatsler’s transformation and the plans for Government Motors: the GM dealer body is a wealthier, more connected group of businessmen than the Chrysler dealer body. In other words, “Old” GM may not go so quietly into that good night.
“It’s a Jeep thing, you wouldn’t understand”. This was the vaguely condescending response I got when I queried my then-girlfriend and current wife about why in the world she would choose such an unrefined and slow mode of transportation. Surely, you can understand my point of view. I mean, the Jeep Wrangler is the ultimate, absolute antithesis of everything performance-related in the automotive world. Well, that is true so long as we are talking about road-going performance. Some, like my wife, get more excited about the prospect of slogging through mud and muck than teeter-tottering on the bare naked edge of control around a downhill decreasing-radius corner. And, for those who get their jollies in the dirt, the Wrangler Rubicon is the ultimate starting point for a true performance vehicle.
And York should piss off. I’m sorry, but court papers released yesterday— part of an SEC slap on the wrist– reveal that Jer’ told his boss Kirk Kerkorian that investing in GM was a “no-brainer.” Of course, this was back in ’05– when the shit was already hitting the fan. Immediately before The Lion of Las Vegas forced York’s elevation to GM’s Board of Directors, and then tried to broker a GM – Renault merger. OK, OK, Kirk eventually made his crust on the playing the dozens with GM (hence the SEC ruling). But I’m thinking that York isn’t the brainiest “auto industry gadfly” in the biz– although it seems like piercing glimpses into the obvious are all that’s needed to catch Automotive News‘ editorial eye. (Sorry guys, but you write this stuff.) “The winners will be those companies that can change their output from larger to smaller and more fuel-efficient vehicles,” York revealed in a presentation to auto dealers and investors. “And that can improve their efficiency to make substantial profits on a less-rich mix of products sold.” And if you doubt York’s sagacity, well, he doesn’t. “There’s no doubt in my mind Cerberus’ strategy was to fix Chrysler up as best they could and find a merger partner,” York said. “I don’t know this for a fact. Nevertheless, there is no doubt in my mind.”
As Farago pointed out in his latest General Motors Death Watch, Automotive News [AN, sub] has suddenly decided enough is enough. The currently moribund U.S. new car (truck?) market is about to rebound. Excellent! I was getting tired of berating Motown for its unsustainable optimism. So, what are the facts that underpin scribe Richard Trout’s faith in the immediate future? “Heavy incentives on pickups and SUVs, combined with gasoline prices that are down about 40 cents a gallon from the July peak, may help the Detroit 3 and Toyota Motor Corp. shore up sagging U.S. sales.” Yes, OK, they “may.” But where’s the evidence they will? In fact, Trout relies entirely on GM’s spinmeistery. “But GM executives found some cause for encouragement in sales of the Chevrolet Silverado and GMC Sierra pickups and the giant Tahoe and Yukon SUVs. The big light trucks had their best months of the year, stoked no doubt by GM employee pricing incentives that whacked thousands off sticker prices.” Folks, not to belabor the point that RF made so eloquently, this is not what responsible adults call journalism.
"If you're sick of high gas prices, one remedy may be the V6 version of the 2010 Chevrolet Camaro." Oh for Pete's sake; AutoWeek [print] is pimping a Chevy that's half a year away from the showrooms. In that sense, Greg Migliore's "Camaro Cure" is re-volting. "Ultimately, the V6 is expected to make up 70 percent of the car's 100,000 sales," Greg unquestioningly reports. "And General Motors says that fuel efficiency– just as much as raw power– will be a key selling point. The V6 Camaro is expected to deliver 26mpg on the highway." It's one thing when a manufacturer quotes highway mileage in an attempt to draw attention away from gas-piggery. It's another when a car mag does so on its behalf, and makes that some kind of lame-ass "talking point." The rest of the article is pretty much as expected, save "…overall the car feels more nimble than Dodge Challengers we've driven." File that one under "invidious distinctions."
Well, here it is, courtesy of LeftLane News. Maybe. The Chevy electric – gas plug-in hybrid sure doesn't look like the show car that GM's been advertising (as if you could go down and buy one). On the other hand, the Volt shown here isn't a Malibu-a-like, which is a good thing. (Unless you ascribe to Ye Olde German "Different Length of Sausages" School of Model Design.) On the other other hand, the Volt pictured lacks the Toyota Prius' instantly identifiable "quirkiness" and attendant green cred. In fact, in this guise, the Volt's front end shares more than a little gestalt with the current Ford Fusion. So, over to you, our Best and Brightest. Did GM's designers get it right?
"As General Motors Corp. showed off its 2009 lineup Thursday," Scott Burgess writes in The Detroit News. "I found myself wondering, 'What's the next Malibu?' So I posed that question to a table full of GM employees during lunch at the automaker's annual event to roll out coming models for the media. The group looked at one another, stammered, and could not offer anything definitive." Wow, a cheerleader embarasses the football team? Well, not exactly. Despite Voltmania and Camarophilia, Burgess suddenly adopts the TTAC-standard position of evolution not revolution. (What else can he do?) "While no one at GM's lunch table could name the next Malibu, individually each of them talked about some of the changes being made to many of the vehicles. This year, the sum of the changes is bigger than any one improvement." Scott's talking six-speed Aura (remember that one?) and truck trannies, a hybrid pickup (good luck with that), the XFE Cobalt (don't they already sell that?) and… that's it. "It's refreshing to see GM take a good lineup and focus on how to make it better now," Burgess opines. "Instead of just talking about all of the vehicles in its product development pipeline. It may cut the lunch conversation short, but it will certainly satisfy consumers." Hang on; when did GM stop talking about future cars? And if GM customers are not satisfied now (never mind winning new customers), how will these changes change that?
According to the AP [via MLive.com], GM has said "no thanks" to a $56m tax credit and grant package designed to save its Moraine, Ohio SUV plant. Ohio Department of Development spokeswoman Kelly Schlissberg said the state is "disappointed and will continue to look for alternate uses for the plant, which employs about 2,400 workers." The General plans to close the plant by 2010, or sooner, because of "a customer shift to smaller vehicles." In other words, it wazzunt me.
As Farago reported, the amount of federal money Motown would need to turn its business around– if money was, indeed, the determining factor– far exceeds the $25b first mooted. Or the $50b since suggested. And now, having floated not one but TWO trial balloons, Ford, GM and Chrysler are playing coy about the ballooning balloons. To its credit, The St. Louis Dispatch has tried to nail down the exact numbers and conditions, to see if their local minivan plant could be saved. "'We know the legislature authorized up to $25 billion, but the amount that could really make a difference likely is much higher,' GM spokesman Greg Martin told the Post-Dispatch. He declined to say how much additional money would be needed or confirm the $50 billion figure. Ford spokesman Mike Moran also did not confirm the increased loan amount. Chrysler spokeswoman Katie Hepler said the automaker is working to access the government loans. She declined to talk about specific dollar amounts or elaborate on where Chrysler would use any money it borrowed." And here's a surprise. "It also appears that some of the older plants owned by foreign automakers could apply for this loan, according to the original language of the legislation. Toyota Motor Corp.'s Georgetown, Ky., plant and Honda Motor Co.'s Torrance, Calif., location are two that fit the criteria." Only… The Department of Energy has until December to write the final rules that detail how to apply for the money.
"Crucifies" may be a bit harsh. Or maybe it isn't. It's hard to tell. The New York Times article detailing the Golden State's new real estate development legislation waits until the eighth paragraph to chart the changes, and even then, it's not entirely clear how it works. "The bill yokes three regulatory and permit processes. One focuses on regional planning: how land use should be split among industry, agriculture, homes, open space and commercial centers. Another governs where roads and bridges are built. A third sets out housing needs and responsibilities… Under the pending measure, the three regulatory and permit processes must be synchronized to meet new goals, set by the state’s Air Resources Board, to reduce heat-trapping gases. Seventeen regional planning groups from across the state will submit their land-use, transportation and housing plans to the board. If the board rules that a plan will fall short of its emissions targets, then an alternative blueprint for meeting the goals must be developed. Once state approval is granted, or an alternative plan submitted, billions of dollars in state and federal transportation subsidies can be awarded. The law would allow the money to be distributed even if an alternative plan fails to pass muster." In English. "The goal is to encourage housing near current development and to reduce commutes to work." Or… "clustered communities," a new stick, the same old carrots and LOTS more red tape.
According to The Detroit News, Toyota has walked down its '09 global sales estimates by 700k units, from 10.4m vehicles to 9.7m. This is the second forecast downgrade; a tacit admission by the world's largest automaker that the U.S. sales slump will not experience the rapid recovery its native carmakers have been
praying for predicting. "[Toyota CEO Katsuaki] Watanabe said he saw as 'fundamental' the slowdown in the U.S. market as soaring gas prices not only crimp car purchases but drives an unprecedented shift in consumer demand from trucks to smaller fuel-efficient models." And just like GM's suits, Toyota's big boss tried to apply a coat of green gloss to the loss. "In his annual outlining of the company's business plan, Watanabe tried to sound an upbeat note by promising green vehicles. He said Toyota will speed up the delivery of a plug-in hybrid — which can be plugged into regular household electrical sockets — initially promised for sometime in 2010, to the end of 2009." Meanwhile, "It is forecasting its first full-year profit decline in seven years as it faces more problems from the weakening U.S. market."
My time writing for TTAC is strictly limited. Farago asked me to pinch hit while he's otherwise engaged. As soon as this site's founder returns from his light bulb changing duties, I'm going back to my regular, better-paying job. So while I've got the floor, I'd just like to share a revelation…. I heard a radio ad today for "Cadillac employee pricing." Prior to that moment, I hadn't really given much thought to the concept of Caddy opting-in to GM's overall firesale. Not until the pitchman assured me "you pay what Cadillac employees pay." And then it hit me. Why would a Cadillac buyer want to buy a car that the people who build them can buy? I mean, if a Cadillac employee can afford a Cadillac, where's the status in that? At the risk of having my foul-mouth censored yet again, that brand is so screwed. Upmarket my ass. And why in God's name do they have to tell everyone about it?
The AP reports Bob Lutz' prediction that GM will be profitable by 2010. Well, almost. "Lutz stopped short of predicting when GM would return to profitability, but said if it can further reduce structural costs, get higher prices for small cars, and if the U.S. auto market recovers, its top executives say they hope to return to black ink in 2010." The Detroit News reports that Maximum Bob mentioned Uncle Sam's
potential contribution. "[Lutz] also said GM and the other Detroit automakers would benefit from low-cost government loans to help them pay to update plants and speed up development of more fuel-efficient models consumers are demanding amid high gas prices."