I was originally hesitant to jump on the Tesla Roadster “bricked batteries” bandwagon, and my initial story was written with a sort of cautious neutrality. Further context will be provided by the details that have surfaced in the 24 hours since the story broke. Hope you’re ready to dive in to it all.
Category: Between the Lines
The controversy over red light cameras, once relegated to websites like TTAC, thenewspaper.com, motorists.org and highwayrobbery.net, is hitting the mainstream media thanks to a new study by the IIHS [PDF here]. The study used the following methodology:
Telephone surveys were conducted with 3,111 drivers in 14 large cities (population greater than 200,000) with long-standing red light camera programs and 300 drivers in Houston, using random samples of landline and cellphone numbers. For analyses combining responses from the 14 cities, cases were weighted to reflect each city’s share of the total population for the 14 cities.
And what did they find?
Among drivers in the 14 cities with red light camera programs, two-thirds favor the use of cameras for red light enforcement, and 42 percent strongly favor it. The chief reasons for opposing cameras were the perceptions that cameras make mistakes and that the motivation for installing them is revenue, not safety. Forty-one percent of drivers favor using cameras to enforce right-turn-on-red violations. Nearly 9 in 10 drivers were aware of the camera enforcement programs in their cities, and 59 percent of these drivers believe the cameras have made intersections safer. Almost half know someone who received a red light camera citation and 17 percent had received at least one ticket themselves. When compared with drivers in the 14 cities with camera programs, the percentage of drivers in Houston who strongly favored enforcement was about the same (45 percent), but strong opposition was higher in Houston than in the other cities (28 percent versus 18 percent).
Sounds like those red light cameras are pretty great after all, doesn’t it? That’s certainly the IIHS’s takeaway…
Read More >
Yes, and yes, says a study of the Resources for the Future (RFF) institute. The Washington think tank’s study examined “the unexplored link between the prevalence of overweight and obesity and vehicle demand” for bigger and more gas guzzling cars.
RFF brands itself as a “nonpartisan organization that conducts independent research.” Their study found “that the prevalence of overweight and obesity has a sizable effect on the fuel economy of new vehicles demanded. A 10 percentage point increase in the rate of overweight and obesity among the population reduces the average miles per gallon (MPG) of new vehicles demanded by 2.5 percent, an effect that requires a 30 cent increase in gasoline prices to counteract.” Basically what they are saying: Fat people choose fat cars. More fat people, more fat cars.
Shame on you if your belly keeps you from reading the numbers on the bathroom scale, you are driving up the cost of our gas, fatso. If you would eat less, we would pay less. If the study is correct. Read More >
Though an objectively awesome car by any (non-environmental) metric (review forthcoming, I promise) some Corvette ZR1 owners are plagued with a strange brake vibration. Which, thanks to the Corvette Forum, is available for all and sundry to see. But let’s dig a little deeper: bearing in mind the customer involved is a personal friend, and his paraphrased comments are as follows.
One of the more admirable qualities of the blogging culture is a relentless underdog streak. Anyone who mans the ramparts of a decent blog is forever scouring the worlds of business, media and opinion for an opportunity to attack the most prominent voices of the day. And TTAC is no exception: we certainly came up by attacking the apologists and Polyannas who are still massively overrepresented in the world of automotive commentary. But what a difference a bailout makes. While the mainstream automotive media spent much of the leadup to the auto bailout making apologies and excuses for Detroit’s decline, TTAC told the unpleasant truth, gaining us new readers and credibility every step of the way. Now that I find myself being asked to contribute to one of the most prestigious opinion outlets in the world (the NY Times op-ed page) on a regular basis, TTAC is no longer the underdog, and other blogs have stepped into the breach to attack us as the new status quo. Fair enough… let’s do this thing.
Yesterday, we ran a story about Art Ross. Ross was the Oldsmobile Chief Designer in the post WW II heydays. He was also a prolific and gifted pornographer. Cars and sex have always been related for some reason. Did you know that in Germany, where the car was invented, “Verkehr” can mean both “traffic” and “intercourse?” I render the guess that there are more people that begun their life by the dashboard light than those who passed away in the passing lane. Many are convinced that autos have aphrodisiac qualities. Many heavily object and say that a car is just a conveyance. Then there are some who think cars are just as vile as porn, and both should be banned. Where does the dear TTAC reader stand in this discussion? Read More >
Is going Between the Lines this time ‘round more like shooting fish in a barrel? Let’s find out with the latest ad campaign from Lincoln, as covered by the Detroit Free Press:
Ford said today it is rolling out a new ad campaign for its Lincoln brand with the tagline “Smarter than Luxury,” and starring John Slattery, who portrays Roger Sterling in the TV series “Mad Men.”
There’s an ironic element there, considering the behind-the-scenes marketing dialogue seen on the TV show. If the boffins at Lincoln chose “Smarter than Luxury” over everything else, I gotta know what they passed on. Perhaps “Lincoln: Our Stuff Looks Like Poop Dung” was already under consideration for the Lincoln Log people. Read More >
A crop of new police cars drew more than 400 law enforcement officials to Chrysler’s proving grounds in Chelsea today to see the Michigan State Police put the cars through acceleration, braking, high-speed handling and other tests.
This article isn’t gonna end well for Ford, and not just because it’s Panther Appreciation Week here at TTAC.
One of the world’s foremost authorities on Automotive Journalism recently got their hands on a trio of Corvettes just for fun. But what unfolded was on the verge of hilarity, if not for their self-proclaimed journalistic superiority over us “punk kids with lots of servers and a desire to get free test drives.”
As we all know, those oblivious to history are bound to repeat its mistakes. Longtime readers also know I’ve gone down this road before, but the powers of my Twitter news feed shoved extra grist into this particular mill. Behold: Alain Raymond’s blog about the death of the V8 engine. Raymond’s weakest argument revolves around one fact: V8’s did lose mainstream appeal shortly after the demise of the Butterfly Collar. But Alain wishes to beat this dead horse for some misguided reason.
People do the right thing, unless money and power is involved. From the highest paid executives to the lowest ranking newbie, money and power is a motivator. Those in positions of accountability are held to a higher standard, and post-bailout Detroit is not immune to criticism. But in an act of corporate cheerleading, Pete Mateja’s Internet flamebait at Automotive News [sub] titled “Detroit had lousy management — and other myths that need debunking” shows how the “experts” got it wrong.
First of all, I don’t have the embed code for this ad. For some reason, GM hasn’t sent it to TTAC and it’s not on YouTube. To see the ad, click over to Autoblog. Second, New GM Chairman of the Board Ed Whitacre should never have done this ad. GM’s single biggest problem, the one that trumps everything: their insular culture. By fronting this spot, Whitacre has become part of the problem. He’s crossed the line from gamekeeper to poacher. He’s lost his independent observer/taxpayers’ guardian status; he can no longer distance himself from the Lutzes and yutzes who animate the GM zombie. Whitacre’s now “one of the boys.” Third, the actual text of this ad [parsed after the jump] misses the boat.
“I’m Ed Whitacre, the Chairman of General Motors.”
What? No hello? Not very friendly, is it? First impressions count. Whitacre looks like a prison warden walking through The Big House. But is that rank-pulling exercise a good thing? GM has four brands left: Buick, Cadillac, Chevrolet and GMC. The whole chairman thing squares with Cadillac’s core clientele, maybe Buick. But Chevy and GMC? Those are supposedly working-class brands. Their average buyer is more in tune with the word “boss.” And not in a good way.
Yes, I know: Lee Iaccoca was Chrysler’s Chairman. But his famous 1984 ad didn’t start with him saying, “I’m Lee Iaccoca, Chairman of Chrysler.” (A subtitle provided the ID.) Lee’s opening line: “A lot of people think America can’t cut the mustard anymore.” That’s the way you do it. Grab ’em by the lapels and don’t let ’em go.
“Before I started this job I admit I had some doubts. [pause] Probably a lot like you.”
What doubts? Did you think GM cars were crap? Crap how? Unreliable? Uncomfortable? Badly built? What? And why “probably”? That’s an admission wrapped in a denial shrouded in mystery. Whitacre’s vague statement is so Old GM: wishy-washy and vague whilst trying (and failing) to be genuine and sincere.
“But I like what I found. I think you will too.”
What did he find? See: above. Except this time the ad’s trotting out GM’s secret weapon in its own self-destruction: the perception gap. Clearly, Eddy’s saying “I was wrong about GM—and so are you.” Which is another way of A) calling himself a close-minded ignoramus and B) calling GM customers close-minded ignorami. Idiots. Fools. It wasn’t OK for Old GM to insult its customers. It’s not right for New GM, either.
While we’re at it, “like” is not the kind of word that convinces people to risk their hard-earned money on a car from a company with a history of building crap (both relatively and absolutely). “Buy a Buick. You won’t love it. But you will like it.” That’s not going to cut the mustard, and he didn’t even say it. Clearly, GM doesn’t know the power of the specific. Or does it?
“Car for car, when compared to the competition, we win.”
What’s with the strange sentence construction? It’s no small thing: people listen to TV ads—if they listen—with one ear. Anything that makes it hard for them to understand what’s being said (let’s not even talk about Ed’s accent yet) dilutes the message.
Ed’s assertion sounds like it’s designed by lawyers. What does “car for car” mean? I know YOU know what it means. But again, what about people who aren’t really paying too much attention? Whitacre should have said “car vs. car.” Or something else entirely, that follows on from the previous statement.
And then there’s “we win.” HUH? By what metric? As the Chairman doesn’t cite an authoritative source for this declaration of victory, the ad asks viewers to take Mr. Clicky Shoes’ word for it. Yes, well, who the hell is Ed Whitacre? [Note: Ed's the guy who said, "I know nothing about cars," the day his appointment was announced.] And if Ed was so stupid as to have doubts about GM products he shouldn’t have had, why should we think he knows shit from shinola now?
“It’s as simple as that.”
Who would’ve thought it could get worse? But it does. “It’s as simple as that” is the same as saying “I know more than you do.” Or “I’m not going to debate this with you.” Or “STFU and buy a car from us.” Yeah, that’ll work.
“I just know if you get into one of our cars you’re going to like what you see.”
So, Ed you feel it in your water, eh? Not good enough. Taken literally, “you’ll like what you see” makes no sense; people don’t buy a car based on whether or not or how much they like the way the interior looks. Taken on a more metaphorical level, it’s a meaningless statement—that depends on Ed’s credibility. Again, he doesn’t have any. For 99.78% of the general population, Whitacre’s a completely unknown quantity. Judging him as a salesman, I don’t like what I see; Whitacre doesn’t have one tenth of Iaccoca’s star power.
“So we’re putting our money where our mouth is.”
The switch to the royal “we” is jarring and completely inappropriate. A personal message has instantly become just another example of a corporate shill mouthing off.
“Buy a new Chevy, GMC, Buick or Cadillac and if you’re not a hundred percent happy return it.”
Anyone else catch that momentary hitch between Chevy and Buick? Seriously; Whitacre is trying to remember the list. He’s mastered it, but it’s not quite there. By the same token, look at his finger point. It’s out of sync with what he’s saying. That’s what psychologist calls cognitive dissonance. Or what normal people call B.S.
In any case, the 60-day guarantee concept is deeply flawed. Buying a car is not like buying a packet of gum in a flavor you’ve never tried before. People hate car dealers. The only thing worse than the thought of buying a car is the thought of returning it. The customer is thinking, rightly, hassle, more hassle and more hassle, ad infinitum.
“We’ll take it back.”
How nice of you. But it’s not “We’ll give you every penny back, plus give you a toaster for your time.” Sigh.
“That’s our new, 60-day satisfaction guarantee.”
Think like a moron for a moment. Ed’s saying that the guarantee will be in place for 60 days. OK, I’m being picky, but this isn’t as clear as it should be. All they had to do was add the 60-day bit to the return statement. Oh, and the usual “no questions asked” caveat, that’s been around since 34 A.D. Like this:
“. . . if you’re not a hundred percent happy after the first sixty days, return it to your GM dealer for a full, no-questions-asked refund. Plus a new toaster for your time.”
“And as always you’ll get our 100,000 mile five-year powertrain warranty on every vehicle.”
That’s “your” vehicle, not “every” vehicle. And sorry, it’s not vee-hickle. Whitacre’s accent just crossed the border from regional to quirky. And that’s opened him up for parody (check back with TTAC in future posts). Whitacre could have, should have said “car” instead. Anyway, what’s the point of mentioning this? Trying to remember two deals is not as easy as one.
“That’s how strongly we feel about our cars and how committed we are to you.”
See how that doesn’t work? By introducing the warranty thing, the connection between the 60-day guarantee and the commitment has been broken. Touchback.
“So put us to the test.”
Test? I’m not buying a car with confidence, I’m buying a car to see if GM’s any good? No thanks. Not with my money. As PCH101 says (below), people want to buy a car they can keep. Duh. And if the car was any good, why would Eddy even mention returning it?
That’s the problem with this type of come on, and there’s no getting around it. And the more expensive the item, the more risk the consumer assumes. The more risk, the less likely they are to buy. Even with a money-back guarantee.
“Put us up against anyone.”
Huh? They’re introducing a new concept—comparison shopping—in the last ten seconds? What’s that got to do with the 60-day guarantee? If I don’t like the car relative to the competition I can return it? Obviously not. But this “we’re better than the other guys” is a different idea that smacks of throwing stuff against the wall to see what sticks. Not that GM’s ever done that before . . .
“And may the best car win.”
This is a blatant attempt to echo “If you can find a better car, buy it.” But it’s totally different. Whitacre’s closing statement admits the possibility that the competition is better than GM’s products. How stupid can GM be? That stupid. And more. Watch this space.
I’ve been harping on about the media’s “Ford didn’t take bailout bucks” meme for some time. Commentators have slated me for slating the Blue Oval Boyz for claiming they avoided the taxpayer trough. In fact, Ford raided the public purse to the tune of $5.9 billion dollars. Yes, it’s a no-to-low-interest Department of Energy “retooling loan.” I repeat: the $5.9 billion loan from the Advanced Technology Vehicles Manufacturing (ATVM) program allows Mulally’s minions to spend $5.9 billion dollars on something else. It’s a bailout. Question: if you’re an industry writer, how do you push Ford’s mega-suckle to one side to keep the “pure as driven snow” show alive? You draw a distinction between “emergency tax dollars” and ATVM loans, while, at the same time, not mentioning the loans. Sarah Webster’s “Ford, Toyota in a close race to No. 1” does that and more, taking Motown’s hometown cheerleading to the next level.
As Webster embarks on a frenetic Ford canonization campaign, she takes the time to dance on Toyota’s grave. Although, you know, they’re not “dead” in the GM or Chrysler sense of the word. Or, in fact, any other sense.
For years, we’ve all watched and wondered when Toyota would surpass GM as the world’s largest automaker. That moment came and went earlier this year.
In the meantime, the world got stuck in economic quicksand, forcing GM, Chrysler and dozens of suppliers into bankruptcy.
The auto industry now emerging from that mess is, in many ways, an unfamiliar one — especially considering how Ford’s star is rising while Toyota’s is falling.
Ah yes, GM and Chrysler didn’t go bankrupt by their own hand. They were unwitting victims (and how) of the global economic meltdown. How long has it been since we’ve heard that bogus excuse for the domestic automakers’ epic failure? Not long enough.
The “Toyota’s on the rocks” story never really caught fire in the mainstream media. Especially as Toyota’s made some bold moves and very public mea culpas to sort its shit out. Still, the “See? See? They’re in trouble too!” story line helps keep Detroit’s chin up. So the kid stays in the picture.
Make no mistake, there’s trouble in Toyota City. The Japanese automaker has lost more than $4.8 billion over the past year. Toyota’s critical U.S. sales are down 34% — worse than the industry’s 32% decline. As such, Toyota has lost a half point of market share this year, selling 16.3% of the new cars and trucks in America.
Whoa! Half a point! Anyone want to tell Ms. Webster how much market share Chrysler, Ford and GM have shed in the last ten years? Don’t bother. She knows the stat and chooses to ignore it. As well as Toyota’s recent ascension to the top of the Cash for Clunkers new car league table.
By contrast, Ford already has endured years of cost-cutting and soul-searching, and it’s starting to stand tall again. All without emergency tax dollars.
Ford’s U.S. sales are down by 28.5% this year, but that better-than-industry performance helped it pick up nearly a point of U.S. market share this year, for 15.5% of all sales. The truck leader is turning out passenger cars that are tops not just in quality but in styling and innovation, too.
Whenever a Motown cheerleader runs out of chants, chances are they’ll start yelling about how great Detroit’s cars are, or will be, despite sales figures. Automotive News sales stats, Consumer Reports black dots, J.D. Power and TrueDelta rankings be damned. It gets woolier.
Ford’s performance led it to post a profit of $2.3 billion in the second quarter, albeit mostly because of onetime accounting gains. But Ford is now in the black, earning $834 million through the first half.
And unlike Toyota, which has lost top executives in recent years, the psychic momentum at Ford seems to be on the rise. While Ford isn’t ready to celebrate, there’s optimism in Dearborn, and more importantly, traffic in Ford’s showrooms.
Stripped of obfuscation, that’s a $424 million Q2 loss. And what the hell’s “psychic momentum”—if not another attempt to shore up a thesis without a strong foundation? Once upon a time, Detroit’s media accomplished this task by comparing the domestics to each other, rather than the barbarians at the gate [note to Webster: they're heeeeeere.] Clearly, Webster’s Old School.
Globally, Ford (5.5 million) has a longer way to go to catch up with Toyota (8.97 million), where Volkswagen (6.2 million) is also a major player.
But more than any other American brand, Ford has the promise to be a world leader. No single GM or Chrysler brand has the global cachet that Ford brings to the showroom.
Yeah, I’ll have that Taurus ’cause Ford rocks in China! Anyway, heading for the conclusion, Webster still has to deal with the 800-pound Toyota in the room. Just ’cause.
The Toyota brand has long promised quality, but that promise means less when the number of problems per vehicle has leveled out among rivals.
Does Webster mean initial quality? Or long term reliability? Either way, Toyota’s rep for quality may mean less, but it doesn’t mean nothing. In fact, it means a great deal. Still.
Since the industry meltdown took its toll, and before, Toyota’s made it clear they’re not about to surrender/ignore/neglect their dedication to producing quality products. Besides, how can Webster single-out Ford’s global prospects relative to its cross-town rivals yet happily dismisses the importance of relative vehicle quality across the entire automotive spectrum? Practice.
God help Ford if they’re as flippant as Webster about absolute and relative vehicle quality. Meanwhile, the coupe de grace. Ish.
Ford today seems to stand for what Toyota and other automakers are hoping for: A comeback.
Seems? That’s like dropping a pom-pom. Only worse. Anyway, if Ford is the poster boy for the auto industry’s eventual rebound, what does that make Lincoln? Just askin’.
[Thanks to Cammy Corrigan for the link.]
I once asked a priest about confession. What was the point? I knew Catholics who’d sin, confess, sin, confess, wash, rinse, repeat. “It’s not a ‘get out of hell free’ card,” he insisted. “Confession means you fully acknowledge your sin, pledge to atone for the harm you’ve caused, promise God that you’ve learned from your mistakes and change your behavior.” Let’s say you do all that and commit the same sin. What good’s an unrealized promise? “None,” he said. “I have refused absolution to repeat sinners because I didn’t believe that they were ready, willing or able to abandon their sins.” And there you have it: New GM’s recipe for disaster. Let us turn to the first sentence of New GM’s first press release.
The new General Motors Company began operations today with a new corporate structure, a stronger balance sheet, and a renewed commitment to make the customer the center of everything the new GM does.
Leaving aside the fact that GM’s opening proclamation makes no mention of its bankruptcy, or what led to its bankruptcy, how can New GM claim it has a new corporate structure? Fritz Henderson was the CEO of Old GM. Fritz Henderson is the CEO of New GM. Mark LaNeve was Old GM’s VP of sales and marketing for North America. Mark LaNeve is New GM’s VP of sales and marketing for North America. Old GM’s ex-Car Czar Bob Lutz has been reinstated as New GM Car Czar. Meet the new boss . . .
Actually, GM is now run by the federal government, under the watchful eye of a twenty-five member, politically-appointed “Presidential Task Force on Automobiles.” As much as Old GM’s management needed a right royal arse kicking—which, as stated above, this isn’t—I still can’t see GM nationalization as something worth celebrating.
Sure, GM’s balance sheet is stronger than it was before the government assumed control. And yes, New GM is “only” carrying $11 billion worth of debt. But any realistic appraisal of its balance sheet must consider cash flow, current assets and future prospects.
New GM’s brands and product plans are in complete disarray. With the exception of its pickup truck, GM’s products are class-trailing. Incentives are high and getting higher (i.e. margins are low and getting lower). GM’s killer apps are, as always, on the horizon.
Meanwhile, when exactly was GM last committed to its customers? Before they allowed [now-bankrupt] Bill Heard Chevrolet to screw every single person that darkened the dealership’s doors because the man moved mountains of metal? Never mind because . . .
“Today marks a new beginning for General Motors, one that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers,” said Fritz Henderson, president and CEO.
Somewhere in the back of my mind, I hear Elton John’s “I’m Still standing.” But if New GM’s so new, why are we getting the same old song and dance from its old—I mean, previous and current, CEO?
“One thing we have learned from the last 100 days is that GM can move quickly and decisively,” said Henderson. “Today, we take the intensity, decisiveness and speed of the past several months and transfer it from the triage of the bankruptcy process to the creation and operation of a new General Motors.”
Here we are again: faster, deeper, harder, oh baby! Anyone remember Chrysler’s contention that speed was the primary advantage of private equity ownership? That didn’t turn out so well. Besides, does anyone really believe that a government-owned General Motors (with the aforementioned twenty-five member oversight team) will be faster than Ye Olde GM?
As I’ve said before, GM’s problem is not speed. It’s direction. GM still doesn’t have a coherent plan for their brands or the models within. Or do they?
“Our goal is to build more of the cars, trucks, and crossovers that customers want, and to get them to market faster than ever before.”
More, faster. See how that works? Or, in fact, doesn’t?
“The success of our recent launches and the exciting new vehicles and technologies we have in the pipeline are evidence of our ongoing commitment to excel at everything we do,” said Henderson. “Our goal is to make each and every General Motors car, truck and crossover the best-in-class.”
According to Fritz’s previous pronouncements, GM’s whittling itself down to 39 nameplates. What are the odds that all of them will be best-in-class? But hey, Fritz feels me.
“Beginning next week, we will launch a ‘Tell Fritz’ website where customers, or anyone else, can share ideas, concerns, and suggestions directly with senior management. I will personally review and respond to some of these communications every day.”
Glasnost at GM? Sounds good! But then, confession is good for the soul. As long as it’s genuine . . .
[NB: Fritz is having a webchat on the FastLane at 4pm EST]
Well, the worm has turned properly on government intervention in the auto industry, as General Motors now seems to fear a government takeover more than bankruptcy. Too bad the choice isn’t either-or. Recent 10-Q filings with the SEC indicate that GM accepts the inevitability of a Chapter 11 filing, but describes the ramifications of a possible government ownership stake with fear and horror. “In the future we may also become subject to new and additional government regulations regarding various aspects of our business as a result of the U.S. government’s ownership in (and financing of) our business. These regulations could make it more difficult for us to compete with other companies that are not subject to similar regulations,” figure GM’s professional worrywarts. These still waters of paranoia run deep.