I spotted this sticker on a (disc brake-equipped) Nissan pickup in the parking lot of the San Jose North Pick-Your-Part during my last trip to California. Read More >
Category: In Defense Of
First off: Bertel needs no defense. I however felt compelled to write this editorial. Don’t you go thinking the latest round of “naughty” videos was all his idea. I egged him on. I think we are privileged to have him. So… Read More >
As someone who has driven over 300,000 non-livery, private-owner miles in various iterations of Ford’s Panther, TTAC’s Panther Appreciation Week struck a bittersweet chord for me. I’ve enjoyed seeing this versatile vehicle-from-another-era get the admiration and respect I believe it deserves, and the peek at the other side of the philosophical coin – courtesy of some Best & Brightest commentators (and Paul) – has also been interesting. But this tribute to the platform’s imminent demise has saddened me, as it highlights how the Panther has represented such a stoic constant on North American roads for so many years. Regardless, change is the only true constant, and it won’t be long before the pride of St. Thomas Assembly is irretrievably crushed by the ever-advancing juggernaut of modernity. Standing at the precipice of this retirement, I feel compelled to look at what the Panther has meant, both in my life, and in the market over these past three decades.
I ought to start this article off with the reasons as to why I decided to write this article. I got scalded recently for criticizing Jack Baruth’s article on why Top Gear USA will fail. On reflection, the scalding was well earned. It’s a bit unprofessional to criticize a fellow worker’s work no matter how much you disagree with it.
But this set off a light bulb in my head. Why should I post a comment about why I disagree with an article, and get browbeaten, if I can write an article of my own, highlighting my thoughts? Isn’t that the American way? Why give something away for free, when you can sell it? Read More >
[Editor’s note: In the absence of an official rebuttal to Edward Niedermeyer’s NY Times Op-Ed on the Chevrolet Volt, TTAC’s own Ken Elias has volunteered to come to the Volt’s defense.]
The Chevy Volt should be a brilliant piece of engineering achievement if it works as advertised. That’s a big “if” and I wouldn’t bet my life that GM’s first iteration of the car will live up to the hype. And that’s only because of the long string of overhyped vehicles that came out of the former GM that simply never delivered. But that’s three decades of history talking – and GM’s a new company today with a different mindset and competitive spirit. Its newest products – the LaCrosse, SRX, Equinox, and Camaro for example – have been well received by the public and there’s no shame putting one of these rigs in your driveway. So let’s start out giving GM the benefit of the big doubt that the new Volt will work as advertised.
If you scan the autoblogosphere on a regular basis, you’ve read some half-hearted eulogies to the best and worst of Mercury. Fair enough, as the Mercury brand deserves every one of those backhanded compliments: sharing too much content with a comparable Fords and (sometimes) sharing too many styling cues with the Lincolns means it couldn’t die off without a dig or two. And it is an easy target: aside from the (lead-sled) post war Yuppie clientele that inspired Mercury’s creation, the original sleeky-Sable and a few old Cougars, this was bound to happen.
But obviously my love for Mercury (here, here, and here) means I’m not going to bury Mercury, but to praise it. And to make sure the brand remains in our collective consciousness just as long as it’s GM counterpart, Pontiac. Wishful thinking, Mehta?
According to popular wisdom, the flood of recalls will change Toyota and will permanently damage Toyota’s market share in the United States (much like what happened to Mitsubishi and their cover up scandal). But there are some people who believe (like I do) that this is “man bites dog” journalism. That the Toyota recall (whilst serious) is being blown out of proportion. It seems that other people are starting to see it that way.
US Recall News‘ reason for being is recalls. They would be dead without recalls. US Recall News has written an article that says that the real recall bogeyman doesn’t live in Toyota City, but in Detroit. The identity of the true bogeyman’s name may surprise some. Read More >
There has been a lot of, well, criticism, of Honda on these pages lately, including allegations that Honda had lost it. So far, more that fifty of the Best & Brightest offered advice on how to save the company from certain annihilation.
Today’s Nikkei says “domo arigato gozaimashita” for all the support, and runs a different story: “Honda Motor Co. has emerged from the economic turmoil at the head of the pack, thanks in good part to a nimble production network that can meet the latest consumer preferences at relatively low cost.” Here is why. Read More >
In a recent news article, RF stated: “…here’s another story where the web pulls the rug from under auto industry types seeking to hide the truth. We’ve been saying it forever (in Internet terms): the collector car market has collapsed. Well, duh. But the mainstream media and specialist press has both been happy to perpetuate the myth perpetuated by the auction houses that their business has been defying gravity. See? Cars are selling for phenomenal prices! Meanwhile, Hagerty’s CARS THAT MATTER is telling readers to pay attention to the men behind the curtain.” In truth, the men behind the curtains are not the market. They are middlemen. They extract a percentage from every participant they can find to witness their activities; Buyer, Seller, hell, even the gawkers have to pay to watch the show. The auction houses are, in ecological terms, parasites on the very market they claim to serve. Like any parasite their success has a tendency to cause harm to their host. These guys are tarted up used cars salesmen. That, and the recent transformation of the car auction into a three ring circus, is what is killing the auction companies, and it has absolutely nothing to do with the collector cars being sold.
All these moves created an artificial market bubble where some people were proven to be fools, easily separated from their money. It successfully convinced them that a machine mass-produced by the hundreds of thousands could have rarity based on factory options. They achieved this by wining, dining, and blinding those fools with the bright lights of live TV coverage. In an era where celebrity is valued above wisdom, why not go for fame and throw a few hundred grand at that Mopar?
Smelling blood in the water, and seeing the resulting feeding frenzy themselves, more parasites attach themselves to the market. Builders and restorers taking less-valued stock from that mass-production pool of used cars and create a host of dubious offerings for the auction block. “Resto-mods.” “Tribute” cars. “Continuation” cars. As a bonus, many of them even turn this activity into TV shows, attaching themselves to the celebrity culture.
Finally even the manufacturers themselves got into the game. Selling the first cars off the lines at auctions. Selling off their own collections. The final insult to both the auction houses and to their own lack of vision: Building retro-cars and selling straight to the consumer.
This whole collection of players created a market-within-a-market, and it inflated too far, too fast to sustain itself. That is what has collapsed. In a decade we might call it “The Muscle Car Bubble” or maybe “The Baby Boom Bubble.” Like all economic downturns a few of the “innocent” were harmed in the collapse, but mostly the damage, deservedly so, has been contained within the bubble’s sphere of influence.
The collector car market is, and always will be, healthy. Collector cars are not beanie babies or Pokémon cards. Automobiles have aesthetic appeal and genuine practical use. They have intrinsic value, both as a utilitarian object, and as a stylistic example of what happens when engineers and designers create something. Sir William Lyons, the man behind Jaguar, once said, “The car is the closest thing we will ever create to something that is alive.”
There is palpable inspiration and creativity expressed in the form of the automobile. People who love cars will always want, buy, and sell them. Private sales make up the vast majority of all collector car transactions, and the Internet is transforming that market from a local to a global phenomena accessible by anyone, anywhere. Car auctions are also dying for the same reason swap meets, car clubs, and buff-books are. You can browse the whole planet’s supply of cars, parts, and automobilia from your laptop or cell phone. On your schedule, at minimal cost. Craigslist has far more reach and power than Craig Jackson. Google will find what you want better than Gooding.
The Collector Car Market hasn’t collapsed. It merely sheds excess now and then when parasitic traders come in and inflate a bubble such as we’ve seen recently. There are top tier collector cars and there are pedestrian collector cars. Duesenbergs and Delahayes will always have value, as will ‘Cudas and Camaros. Only when the latter types start trading at prices near the former you have a market as artificial as testicles hanging off a truck.
Smart people and smart money were never in the bubble anyway. The market survives. Smart auction houses will even survive the stupidity of some of their brethren. Those that haven’t fallen into the trap of celebrity culture glitz will continue to bring buyers and sellers together for as long as there are titles to trade along with the hardware. What we are seeing is the deserving death of a small portion of the market. Couldn’t have happened to a more deserving bunch.
This website has stood out front in condemning the pro-corporate cowardice of the paper car mags, and rightly so. But when they show some courage and get it right, they deserve a shout-out. In the proud TTAC tradition of recognizing all viewpoints, I salute Jamie Kitman’s latest column in Automobile. Kitman’s point: the United Auto Workers (UAW) make a handy whipping boy, but contrary to the new conventional wisdom, they are not the Great Satan that sank our auto industry. In fact, the money the UAW made for decades was a good thing. “Courage,” you say? If you’re like many here, that’s not the adjective you’d use . . .
You probably think about the auto workers union something more along the lines of “pinko Keynesian socialism.” We’re talking world-class wages for the lazy, shiftless louts who famously tied beer cans inside the fender as a practical joke on the buyer? The same bums whose panel gaps were so sloppy, it’s a wonder said can didn’t simply fall out in the second month of ownership?
Not so fast. Consider this: the heyday of the UAW just happened to be the heyday of the American auto industry, whose vitality we now mourn. It was Henry Ford himself who actively overpaid his workers by his era’s standards, so they could afford his company’s products. (Compare that to today, when Wall Street punishes Costco for doing the same.) For decades, the UAW was the mechanism by which America’s working class continued to share in the auto titans’ prosperity.
And what did those bums do with their ill-gotten gains? They became what those same corporate media organs (I’m looking at you, military-contractor GE employee Tom Brokaw) lionize today as The Greatest Generation. The generation that broke Nazism, built Levittown, beat polio, and put more of their kids through college than any generation before.
What made this generation of Americans so Great when they banded together to give up their bodies to the corporate war machine, yet such unpatriotic slobs when they banded together to resist the economic might of the corporate industrial machine? Perhaps the answer we’ve all accepted as gospel has something to do with the seven corporations who now own virtually every medium where you’ll hear the story.
But crack open a few dusty, pre-media-oligopoly history books. You’ll get a quick reminder that there was nothing casual—and a whole lot that was courageous—about the drive to unionize American factories. Workers in places like Haymarket literally gave their lives to get out from under rich industrialists’ thumbs. That isn’t the kind of passion that’s prompted by compulsive laziness.
So why did they do it? If you think this is a shopworn parable about an obsolete problem, consider how our largest retail corporation has made billionaires of its owners by selling us merchandise made by Chinese sweatshop laborers whose average—average—wage is 13 cents an hour.
Those owners have a choice, you know. They could make the choice Henry Ford made. The same choice Detroit’s workers enforced on their employers for decades, to the enduring benefit of the nation. The same choice Costco makes today. They just don’t want to.
Our economy is sinking in a deflationary spiral, precisely because the loss of jobs has sapped consumers’ buying power. Yet, as we slowly feel the quicksand rise past our chins, our last gurgled oaths are damnations cast on ourselves and each other for having ever greedily wanted to keep our jobs.
IM(not especially)HO, you can’t discuss The Truth About Cars without confronting The Truth About Car Workers. And like it or not, that truth leads you straight into the economics of class warfare.
The people who crucify this President for trying to keep America’s #1 middle-class job source alive are the same ones whose pet publications think nothing of trillion-dollar handouts to Wall Street. On the altar of this cold-blooded religion, they’re eager to sacrifice the easy target of a clumsy, mismanaged, uncompetitive Big 2-1/2. As for the millions whose lives dissolve into poverty, alcoholism and suicide when their sustenance is stripped away? Merely the collateral damage of some healthy “creative destruction.”
Ultimately, that’s where I can’t get on board with the gleeful UAW-basher crowd. All we hear today is that American citizens by the tens of millions can be fecklessly reduced to the gutter, but the artificial corporate entities we created to enhance the general welfare are somehow “too big to fail.” Pity is, the people pushing this pro-corporate groupspeak don’t realize their god is as uninterested in their faith—or their fate—as that funky bird-beaked statue Yul Brynner beseeches for plague relief in The Ten Commandments.
You know how that story ended, right? His son died anyway, and nobody cared.
Well, it looks like the American version of cash-for-clunkers is going to get past Capitol Hill, and I find myself conflicted. On the one hand, I’m getting a little sick and extra wary of more money going to prop up auto sales (I figure there is going to have to be a real reckoning before things can get better, and I’m leaning toward letting it happen). On the other hand, considering what it is (actual law-to-be and not an academic case study) this is about as good a clear-the-clunkers bill as we’re going to get. The New York Times Freakonomics blogger Steven Levitt looked at this one on Friday (I went over Germany’s version in February). Just about everything he says is true, but there is one point he missed (and was nice enough to call attention to) that throws the whole argument in opposition out of whack. We’ll get there, but first, what’s right about it?
The first thing they got right is the credit for scrapping. Back in February, I complained that the €1000 credit was too small to motivate much action. I was wrong, but only just—the hottest sales went to the cheapest car on the market. $3500 to $4500 is a good number, about a 20 to 25 percent down payment on a lot of practical vehicles (enough to keep from getting too far upside down), without completely messing up the used-car market.
Then there are the ownership and scrapping rules: simple, straight-forward and mostly enforceable (someone will run a scam, they always do, but that will be the exception). We want running vehicles taken off the road for good, so the vehicle must have been insured for a year and must be scrapped.
The mileage rules seem both too open and too restrictive. A lot of vehicles will fit the mileage rules and a lot more will qualify to be purchased. On the surface, this is greenwashing and pretty weak at that. It’s actually a good thing; the law is aimed at people buying actual practical vehicles, rather than propping up a handful of favorite models (most prospective buyers of “green-mobiles” don’t own a qualifying vehicle anyway). All of these rules are straightforward and defensible because of another effect.
For a blog about unintended consequences, Levitt really blew the most important (unwritten) part of the law. At least he was open about not knowing the true prices of used cars. Bad as the new car market has been, the used car market has been worse (though showing signs of recovery), especially older SUVs (the very target this kind of cull). A simple glance at his feedback shows him that 4000 odd dollars is a 400-500% improvement in value for a large number of formally “popular” vehicles.
It is this margin between “book” value and “bill” value that will drive most of the action on this bill (there will be exceptions, but bad cases make bad law). A better name for the bill would be the “Get the Blazers and Explorers off the Road Act.”
Once upon a time, these two vehicles ruled the car market, along with a few others (e.g., Durango) and foreign relations (e.g., Rodeos). This success came back to bite them when SUV demand dropped. Unlike their bigger cousins, they couldn’t offer much “utility” to justify their cramped size and thirst. There are plenty of alternatives, from sedans, to wagons, to CUVs that can do everything they can do and better while being roomier and more fuel-efficient. Also, they are notably thirsty (remember 18 mpg is the ceiling, not the floor). If you’re trying to push average mileage higher, the least useful gas hogs are a good place to start. Especially since oversupply and changes in demand have dropped trade-in values for these old-school SUVs down near three figures.
While most of the culled vehicles are likely to be domestic, the incentive applies to any purchase. The competition gets to sell to people who were likely out of their reach before, while the domestics get the additional bonus of getting rid of some of the most troublesome pigs in the python. Hopefully, this reduction will help push up residual values, which is the only practical way the car market will get to anywhere near the old peak. Of course, for a diet to work, you have to change your habits as well.
Again, I’m of two minds on this law. I don’t want to see an endless sea of nickel-and-dime assistance bills coming out of Washington (propping up two companies, one needing to die, and one that seems unlikely to change, is bad enough). On the other hand, once you strip away the trappings, the bill is well thought out and (comparatively) cheap. It’s no magic bullet, but at least it’s pointed at the right target.
Over the last year, as this unparalleled automotive sales depression has picked up steam, I have observed unprecedented vitriol directed at both Chrysler and General Motors. Here on TTAC; on Autoblog, Jalopnik, CarDomain, et al.; and in the mainstream press, the companies receiving federal aid have been criticized. I just couldn’t understand it. It’s as if the only vehicles these companies ever built were the Jeep Compass and Pontiac Aztek. Critics seem to have completely forgotten all the great cars both companies are building right now and have built over the years. At the same time, they’ve overlooked Chrysler and GM’s importance to their employees, suppliers and countless communities from coast-to-coast. “Stakeholders” who have a direct impact on as many as one-in-ten domestic jobs.
Then came the contentious debate about bailing out Chrysler and General Motors which culminated in President Obama’s address on March 30. Obama gave Chrysler thirty days fix its balance sheet and close its alliance with Fiat—or face liquidation. GM was given an additional thirty days to restructure itself or face bankruptcy. While Chrysler came within days of escaping bankruptcy, a few of its dissident bondholders balked and Chrysler was thrown into a Chapter 11 filing that many pundits felt it would it would ultimately result in liquidation. While many observers rooted for it to failure, Chrysler has emerged from bankruptcy with unprecedented speed. Congratulations.
Back in early November, in what seems like a lifetime ago, the talk in the automotive world was of a possible “merger” between GM and Chrysler. I thought that this was a bad idea and would quickly lead to the dismantling of the Auburn Hills automaker and the loss of at least 30,000 US jobs. I came out and said that there was a far better partner for Chrysler who needed small car technology that they couldn’t afford to develop on their own. That partner was Fiat, which had the obvious and complementary need to sell vehicles in the United States in its quest to become a truly global automaker.
On January 20, Chrysler announced it was in serious partnership talks with Fiat to merge their operations; a move that would help both cope with and survive in the deepening worldwide automotive sales depression. This sales implosion was not only was impacting weak regional automakers but successful global ones like BMW, Honda, and even Toyota. All were seeing sales volumes declining by 40% or more as the virus was spreading around the globe.
Then, as now, I believed that an alliance with Fiat was Chrysler’s best and probably last hope for survival and was pleased to see yesterday’s deal between Chrysler and Fiat concluded. I truly believe that it will have a positive impact on both companies and will give us, as car enthusiasts, additional choices. After all, what can possibly be bad about Alfa Romeos returning to our shores?
Meanwhile, it should be said that other nations have taken extraordinary steps to protect their home-based industries. Why shouldn’t we do the same, especially since we have provided completely open access to our market allowing them to build their export industries? For example, I have absolutely nothing against Hyundai and Kia. But what’s fair about the fact that South Korean manufacturers can sell more than 600,000 vehicles a year here in the United States, yet our manufacturers sell fewer than 10,000 units annually south of the 38th parallel?
Last year, when driving to cover the Los Angeles Auto Show, I was forced to take a detour off the freeway. I stopped at a Starbucks in the Asian enclave of Alhambra off I-10 to get my e-mail. As I pulled into the parking lot, I noticed something strange: there wasn’t a single American brand car in the lot. While there were a few BMWs and Mercedes, every single car in the lot was of Asian origin. I walked into the Starbucks thinking to myself that Asian buyers, consciously or unconsciously, appear to buy homogeneously, supporting their nation’s car builders. Why don’t Americans? It’s because our market is so open that we can. In retrospect, maybe this explains why the American public—and our politicians—gives our own companies such a cold shoulder.
I hope the restructuring of General Motors is ultimately successful. The fact that some are calling for a boycott of “Government Motors” strikes me as absurd. Collectively, we as Americans will soon own 60 percent of New GM. Why would we not buy vehicles from a company we own?
[Read more of Rich Truesdell’s work at automotivetraveler.com]