The Truth About Cars » Industry

Editorial: Opel, Aftermath and Prelude

Bertel Schmitt — Thu, 05 Nov 2009 14:09:20 +0000

On Tuesday, twenty years after the fall of the wall that separated the two Germanies, German Chancellor Angela Merkel went to Washington. For the first time since Germany’s Chancellor Adenauer in 1957, the topmost German addressed Congress—to roaring applause. There was another wall. A wall of silence. Nobody in the US government—owner of General Motors—supposedly had [...]

Editorial: The Carless Kids

Edward Niedermeyer — Sun, 25 Oct 2009 21:27:49 +0000

We’ve seen the signs coming for some time: rumors from Japan, declining car sales at home, advertisments selling cars as “the ultimate mobile device.” And the picture that’s beginning to reveal itself is a challenging one for fans of four-wheeled transport. Young people, once a deep well of enthusiasm and sales growth for the car [...]

Ford 1979 vs. Ford 2009: What’s Changed?

admin — Sat, 03 Oct 2009 18:04:10 +0000

So exactly how did Ford achieve quality equal to Toyota? Or are their TV ads misleading, as the ads from decades ago which proclaimed “At Ford Quality Is Job One”? This was the question in my mind as I returned to the Sharonville Transmission Plant after exactly 30 years. A long term friend, who did not jump ship in 1979 as I had done, when it looked like Ford was going to self destruct, got me past the guard post for a tour of the plant. Jerry had seen what he called “a compete transformation of Ford Motor Company” during his 37 years. He said I would not recognize the place.

Make Cars Not Trade Wars

Andrew van der Stock — Thu, 17 Sep 2009 16:43:13 +0000

Your car is made up of thousands of components, manufactured all over the world and assembled in many places by humans and robots. There is simply no such thing as a 100% “domestic” car anywhere in the world. When (not if) artificial barriers are placed on the manufacture, sale and movement of parts and the eventual manufacture, sale and movement of the resulting vehicle, there are two common outcomes. The best-case scenario is you’re going to pay more---effectively stealing from you and everyone in the global economy. Unfortunately, the typical result is that you cannot buy most of the cars made on this planet in your local market.

Editorial: Luxury Carmakers Hoisted by Their Own Petard

Robert Farago — Thu, 27 Aug 2009 04:16:04 +0000

Thanks to Uncle Sam's Cash for Clunkers program, even the weakest of America's mainstream automakers will live to die another day. Meanwhile, the so-called "mass luxury" brands are hurtin' for certain. The falling tide of the global economic meltdown has left Audi, BMW, Cadillac, Lexus and Mercedes stranded, flopping around on the metaphorical beach, gasping for the oxygen of financial lubricity. It's hard to feel sorry for any of them. The upmarket marques marked the last ten years or so by chasing volume sales with "entry level" models that cheapened and weakened their brands. Is it any surprise that the very customers that fueled their expansive profits have abandoned them in droves, as badge snobbery has kept pace with financial security (or lack thereof)? In other words, the fact that these "luxury" brands are "suddenly" in worse trouble than everyone else is their own damn fault.

Editorial: How GM Tried to Win Me Over, Part Three

Darwin Hatheway — Tue, 18 Aug 2009 05:46:32 +0000

While driving the Buick LaCrosse, I asked Line Director Jeanne Merchant a question: what could she tell me about reliability that would persuade me, a satisfied Toyota owner, to jump ship? Merchant gave a pretty good answer, but I was busy trying not to run over traffic cones. In a subsequent phone interview, Merchant said reliability starts early in the process. From design to component testing, from durability tests to audits and feedback, from computer modeling to real world testing, they make sure every part of the car and all its systems are built right and performing to specification. And they take it very, very seriously. “The LaCrosse is very personal to me," Merchant said. "I’ve worked with it for years. Everybody else involved feels the same way. And the same goes for the other product lines.” Process and passion. Is it enough?

Editorial: How GM Tried to Win Me Over, Part One

Darwin Hatheway — Fri, 14 Aug 2009 17:35:12 +0000

A few weeks ago, I received this from GM Communications: "I've noticed some of your comments on our Fastlane blog. We are looking for passionate and influential consumers to participate in an upcoming showcase on August 10, 2010 in Detroit, MI. Would you be interested in a GM-hosted opportunity like this to learn more about our future vehicles and company?" I was more than a little surprised; my FastLane posts are generally uncomplimentary regarding GM's products and business decisions. “Do they know we own three Toyotas?" my wife asked. "And we gave a fourth to our daughter, who’s happily driving it at 150 thousand miles?” “I think that’s part of it; they want to know what it will take to win me over.” “They could try building cars that are as reliable as Toyotas.” “I’ve suggested that.” “Don’t you dare bring home a GM car," she warned.

Editorial: Why I Hate Cash for Clunkers

Michael Martineck — Wed, 12 Aug 2009 00:26:02 +0000

The CAR Allowance Rebate System---C.A.R.S---sounds like a ‘70s Saturday morning cartoon about guys in striped jackets using trick vehicles to save the world. In fact, that would actually be preferable to the program currently airing, at cost of three billion and counting. Cash for Clunkers may be popular with a healthy segment of the population, but that group doesn’t include a lot of economists. In terms of economic policy, C4C would benefit from a little C4, if you know what I’m sayin’.

“Cars for Comrades: The Life of the Soviet Automobile”

Lewis Siegelbaum — Wed, 05 Aug 2009 13:29:52 +0000

I set out to write a book not so much about the varieties and comparative deficiencies of cars in the Soviet Union as what these objects meant to Soviet citizens. The structure and organizing principles of the book were among the first things to become clear. There would be three chapters on the “Soviet Detroits”---the places where automobiles were built, the people who built them, and how the cars and trucks they produced both embodied the state's agendas and inspired popular identification.

Editorial: Chrysler Destroys Its Historical Archives; GM to Follow?

Bob Elton — Mon, 27 Jul 2009 01:10:12 +0000

Archives are the foundation of historical research. Without access to primary material---be it documents, photographs, financial statements, engineering or test reports---historians lack the building blocks necessary to write the chronicles that inform our understanding of the past and illuminate the future. To their credit, America's automakers have gone to great lengths and expense to preserve and protect the historical documents which chronicle and define their existence. Until recently. As Chrysler and GM plunged into bankruptcy, they turned their back on their own heritage, and destroyed a priceless part of our collective past.

Toyota to Leave the North American Market?

menno — Thu, 23 Jul 2009 01:04:40 +0000

Toyota is the top automaker in the world, and has grown to this point by using methods put into place by one lone individual crying in the American post-war industrial wilderness. His name was Deming, and his message was (paraphrasing) “make it right the first time and it’ll be less expensive, better for the customer and more profitable for the manufacturer.” He also laid out how best to continually improve. The Japanese took this message and ran with it, patiently decimating the competition over half a century.

Editorial: The Truth About Rare Earths and Hybrids

Robert Farago — Wed, 22 Jul 2009 12:13:16 +0000

There’s no doubt about it: the automotive landscape is changing. Carmakers around the globe are embracing electric propulsion, whether the volts are generated by a gasoline motor, a fuel cell, a distant power plant or a combination thereof. New companies seem to be springing up overnight to take advantage of the government’s desire (and money) to wean motorists from their petrochemical "addiction." While everyone is rushing to produce politically-correct powerplants, one fundamental question that remains largely unexamined: from where will manufacturers secure the raw materials needed to mass produce this new technology?

Editorial (Conspiracy Edition): Opel, RHJ, GM, Bilderberg, Rattner and Black Helicopters

Bertel Schmitt — Fri, 17 Jul 2009 14:16:17 +0000

Last night, make that early in the morning here in Beijing, I received a pleasant phone call. The lady identified herself as working for a large and reputable German newspaper. We exchanged German pleasantries, as much as they exist. Then she said: "You wrote about RHJ, Ripplewood and Opel? Do you know anything about Tim Collins' connections?" I confessed that I know of a recording artist named Collins, but his first name is Phil. "TIM Collins, the owner of Ripplewood," she said. "Sorry, never met the guy" was my answer. She says: "Ok, maybe I have to dig around his old compatriots myself." With these words, she bid me ta-ta. Are you the type who is worried of black helicopters? The New World Order? The Trilateral Commission? The Bilderbergers? Then read on. If you think conspiracies are bunk, skip to the next post.

Editorial: “Ten Most Unfortunate Car Names”

Robert Farago — Tue, 14 Jul 2009 16:43:48 +0000

Glenn sent us a link to this list on oddee.com. And the winners are: 10. AMC Gremlin - Wikipedia: "Gremlin is an English folkloric creature, commonly depicted as mischievous and mechanically oriented, with a specific interest in aircraft. Although their origin is found in myths among airmen, claiming that the gremlins were responsible for sabotaging aircraft, John W. Hazen states that 'some people' derive the name from the Old English word gremian, 'to vex'. Since World War II, different fantastical creatures have been referred to as gremlins, bearing varying degrees of resemblance to the originals." Such as . . . Howie Mandel. The AMC Gremlin wasn't known as much for mechanical malfunctions as its questionable styling. That said the name didn't stop 671,475 American and Canadian customers from buying one. Well, I assume it was one.

Editorial: Imagine a world where Steve Rattner decides that Ken Elias should become the anointed King of GM

Ken Elias — Mon, 13 Jul 2009 14:50:35 +0000

That’s right, the CEO in charge of Government Motors. (Ok, don’t really ask me why I think I’m qualified; let’s just suspend belief for a few minutes shall we?) So what would I do? First, I’d insist on a new wardrobe for every person at every level. Gone are all the suits for the white-collar workers. Factory workers can’t wear jeans and t-shirts or whatever. Nope, everyone in the company now wears the GM uniform, kind of like the military. The new GM garb consists of coveralls in blue and white with a GM logo on the back, and each worker gets a name tag to pin on the front. Ranks are determined by stripes, bars, and stars, just like the Army. As CEO, I get four stars on the shoulder epaulets. And of course, there’d be a “dress uniform” for outside events.

Editorial: GM Chapter 7?

Jehovah Johnson — Mon, 29 Jun 2009 12:49:32 +0000

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.

Editorial: Volkswagen’s Piech Blackmails Porsche’s Wiedeking: Deal by Monday or Die

Bertel Schmitt — Sun, 28 Jun 2009 08:37:17 +0000

A week ago, we predicted that Volkswagen, buoyed by stellar numbers, would soon swat nuisance Wiedeking once and for all. It didn't take long. Ferdinand Piech, chairman of the supervisory board of Volkswagen and co-owner of Porsche, pulled out a big gun and put it to the head of Wendelin Wiedeking, CEO of Porsche (and theoretically Piech's employee). Piech said (we are paraphrasing in the interest of brevity): "Say uncle by Monday. Or you're dead." Nice family.

Editorial: Piech vs. Wiedeking—Leaks, Letters, Lies and the Triple Witching Hour

Bertel Schmitt — Fri, 19 Jun 2009 08:35:44 +0000

Assume for a horrifying second that you are the chairman of the board of one of the world's largest auto companies. You also own large chunks of a smaller auto maker. Your executive assistant brings in a letter from one of the top managers of that smaller automaker. The letter says you broke the law, you hurt the company, and he may hold you personally liable for the damage. To the tune of, oh, several billions. Euros. What would you do? Right. Send down security with a moving box and have the guy escorted to the factory gates. Ferdinand Piech, chairman of the board of Volkswagen, supervisory board member of Porsche, and one of the largest owners of Porsche received such a letter from Porsche CEO Wendelin Wiedeking. The letter arrived a month ago. Wiedeking still has a job. But the letter has been leaked to the press. The day before Wiedeking's day of reckoning.

Editorial: Connect the Dots: Could GM Get Their Own Version of the Prius?

Frank Williams — Thu, 18 Jun 2009 23:44:36 +0000

GM is shutting down production of the Pontiac Vibe at the New United Motor Manufacturing, Inc. (NUMMI) plant in California. GM has sold some car or another based on the Corolla ever since they jointly opened the plant with Toyota. GM doesn't need them to produce another small car, as they're looking at plants in Michigan, Wisconsin and Tennessee for that. That's the first dot. And away we go!

Editorial: GM/Chrysler Dealer Cull Explained. Ish.

Jim Brennan — Thu, 18 Jun 2009 03:05:46 +0000

The automotive retail landscape has been dramatically reshaped as both Chrysler and GM together have terminated almost 2,000 dealers as part of their on-going restructuring efforts. They were able to use the bankruptcy process to circumvent strong state franchise laws to shed dealers. At times there appeared to be no rhyme or reason to the selection process, leaving both dealers and consumers perplexed. Last week, as new details and documents surfaced on thetruthaboutcars.com on why certain GM dealership agreements would not be renewed in 2010, Automotive Traveler took an in-depth look at the closing process.

Editorial: What Would Deng Xiaoping Do?

Bertel Schmitt — Wed, 17 Jun 2009 09:07:56 +0000

China is becoming the new America, while America is becoming the old China. Jack Perkowski thinks it's happening right now. Jack is an Old China Hand and a colleague in the automotive parts business. He's an American, and a Yale graduate. 15 years ago, he came to China and started ASIMCO, an auto component manufacturing company. In January, Perkowski left the company. The global decline in the business didn't spare ASIMCO. Perkowski is a true Lao Wai, which literally translates into "Old Foreigner" in Mandarin. From one of the first in China, we inherited a lot of his experience. Some is chronicled in Perkowski's book Managing the Dragon, which made the best seller lists. Most is regularly updated in Perkowski's blog that goes by the same name. In a recent post, he left us some interesting thoughts. Some may find them revolting, even seditious.

Editorial: Boycott the GM Boycott

William C Montgomery — Thu, 11 Jun 2009 16:43:34 +0000

In recent months we have seen the Obama administration nationalize the majority of the domestic automobile industry. A recent poll indicates that a decisive majority of Americans think this is a really, really bad idea. Furthermore, the action is illegal. The Constitution of the United States of America has endowed the congressional branch of the government with the sole power to spend money. Article 1, Section 9: “No money shall be drawn from the treasury, but in consequence of appropriations made by law [i.e. by the legislative branch].” This makes the financial seizure of General Motors with money appropriated by congress for the use of stabilize the banking system a brazen act of embezzlement. (The witless leader of the House of Representatives says that King Obama has not requested that they pass legislation authorizing expenditures to GM and Chrysler, so it must not be needed.) And so there has been cry among some right wing bombasts to boycott the purchase of GM cars. This too is a bad idea.

Editorial: Treasury Secretary Tim Geithner in China for GM’s C11

Bertel Schmitt — Mon, 01 Jun 2009 10:10:39 +0000

US SecTreas Timothy Geithner quickly got out of DC for the Monday curtain call of the artist now known as Government Motors. Geithner went as far as Beijing to distance himself from the performance. Keeping a distance didn't mean keeping his mouth shut. From Chrysler and GM, "we want a quick, clean exit as soon as conditions permit," Geithner told students at Peking University in Beijing. Reuters took notes. "We're very optimistic these firms will emerge from restructuring without further government assistance." Strangely, everybody shares his optimism . . .

Editorial: Opel Watch: A Deal, But Not a Contract

Bertel Schmitt — Sat, 30 May 2009 06:53:06 +0000

It was a long night again. Not as long as the disastrous Wednesday/Thursday meeting. And it didn't end in invectives. At 2:15 in the morning, Finance Minister Peer Steinbrück stepped outside Chancellor Angela Merkel's offices and reported: "I can tell you that a deal has been reached." If you looked hard enough, you could see holy white smoke rising into Berlin's night sky.

Editorial: Why the So-Called “Right to Repair” Legislation is Unnecessary

admin — Tue, 26 May 2009 18:32:30 +0000

[This editorial was sent to us by Charley Territo from the Alliance of Automobile Manufacturers.] For the past eight years, a group that represents aftermarket parts suppliers has lobbied in Congress and state houses across the country for legislation that would give them free access to the intellectual property of automakers. Automakers spend more on research and development than any other industry. The proponents of this legislation can’t keep up. Their hope is that passage of Right to Repair would cut down on the costs and time needed to develop aftermarket parts to compete with OEMs. In practice, this legislation would do nothing to address the problems the CARE coalition says exist. It is a solution in search of a problem.

Editorial: Why Chrysler and GM’s Dealer Slash and Burn Won’t Work

John Horner — Mon, 25 May 2009 12:22:53 +0000

The grand poobahs at the PTFOA are Wall Street bankers and political insiders. None of them have built or run real businesses designing, marketing, selling and supporting high priced consumer products. Everything they think they know they learned from books and lectures, not from actually doing stuff. The old story goes: “When your only tool is a hammer, every problem looks like a nail.” To the Wall Street types, slash and burn is the hammer they know. Even President Hope has taken to using their favorite phrase “Lean and Mean." Surely we need lean, productive companies, but who needs mean?

Editorial: Opel Watch: Russia vs. China

Bertel Schmitt — Sat, 23 May 2009 10:34:43 +0000

One amazing aspect about the hunt for the distressed assets of Chrysler and GM is the absence of the Chinese. Weren't they eager to snap up anything they could get their hands on? And who would have thought that Fiat of all auto makers would walk away with Chrysler---and possibly large parts of GM---if their Opel bid gets approved? The absence of the Chinese was duly noted in Ed Niedermeyer's piece "Where Is China?" It talked about xenophobia, and the discussion soon turned into a xenophobic slugfest and had to be closed.

Editorial: And Now for a Word from Our Sponsor . . .

Frank Williams — Thu, 21 May 2009 14:25:10 +0000

How many Mercedes owners change their own oil to save a few bucks? The latest "Meet the Volkswagens" TV ad doesn't just insult Benz owners--- and everyone else's---intelligence. It's also racially insensitive. By depicting a middle class white guy with his face blackened with oil, it raises the specter of 19th century minstrel shows. OK, that's a stretch. But so is VW's supposition that reminding customers of their over-familiarity with their local dealer's service department is a good thing. And what does a Microbus sliding out of a nearby garage have to do with anything, Amigo? Wait . . . cue-up the Routan commercial . . .

Editorial: President Obama Joins America’s CAFE Society

Robert Farago — Mon, 18 May 2009 19:43:44 +0000

Politics is the art of the possible. In other words, it's the art of manipulating expectations. In other other words, Barack Obama didn't achieve the highest office in the land by doing things. He became president by promising to do things. And now that he's actually got to do stuff, Obama must resort to the politician's best weapon in their endless fight to reconcile expectations and reality (i.e. special interestes): loopholes. Those exquisite exceptions that allow those supposedly affected by a piece of legislation to avoid the law's intent---to the point where you wonder why anyone bothered to write it in the first place. Only the answer to that question is obvious: so that the politicians who crafted the law could be seen to be doing something that meets with public approval. Ladies and gentlemen, I give you the new CAFE standards.

Porsche Vs. VW Soap Opera: All My Workers

Thomas Minzenmay — Mon, 18 May 2009 16:12:57 +0000

In the ongoing drama between Porsche and Volkswagen, the MSM tends to forget that this is also a tale of two unions. Volkswagen is organized not to say owned by the German metal workers union. With 2.3 million members, IGM is the single biggest union in the world. Half the VW supervisory board belongs to the unions. In case of a deadlock, the decisive vote lies with the stockholders. The unions can also count on the state government---with its blocking minority vote--- being "sympathetic" towards their suggestions. Porsche has their own union representation: The Porsche Workers' Council. So just as we've got Porsche - Piech battle royale, there's an IGM vs. Porche Workers' Council cage match. Let the games begin! Or, uh, continue.

Editorial: Nine Questions I’d Like Answered

Frank Williams — Mon, 18 May 2009 12:40:02 +0000

Anyone who's spent any time around preschoolers knows they can ask some really hard questions. Fortunately, even questions like "why is the sky blue" or "where do babies come from" can be answered to their satisfaction with a little thought and careful wording. Questions from gearheads are a bit tougher and aren't as easily answered. Here are nine questions I'd love for someone to answer. That is, if there really are answers to be had.

Editorial: Ferdinand Piech: The Godfather, Part 2

Thomas Minzenmay — Sat, 16 May 2009 11:41:47 +0000

A man who doesn't spend time with his family can never be a real man. Piech certainly spends a lot of time with his family, however, they‘re seldomly good times. It has been a long tradition for the Piech and the Porsche side of the family to fight each other and the power struggle over at Volkswagen is merely an extension of that.

Editorial: Ferdinand Piech: The Godfather, Part 1

Thomas Minzenmay — Fri, 15 May 2009 16:11:20 +0000

Hakan Samuelsson thought he had it all figured out. In 2006, the CEO of German commercial truck manufacturer MAN schemed to take over his former employer, and Swedish rival Scania. He had the banks behind him. VW owned 30 percent of Scania; they had to agree to the takeover. And why not? Volkswagen had no use for Scania, as VW’s commercial truck division only operates in South America. So Hakan Samuelsson made a deal with Bernd Pischetsrieder, then head of Volkswagen. Unfortunately for Mr. Samuelsson, he talked to the wrong guy. Ferdinand Piech, the person pulling the strings over in Wolfsburg, had different plans. . .

Editorial: Wiedeking and Piech, the War of the Hard-Noses

Bertel Schmitt — Thu, 14 May 2009 17:37:29 +0000

Poor "walk-on-water" Wendelin Wiedeking is getting it from all sides. Yesterday, he was the Jesus Christ of the automotive world. Only He could perform the miracle of having more profits than sales---two times in a row. The multiplication of bread and dead fishes is mere amateur hour compared to the unnatural act of turning sales of €3b into profits of €7.34b. But will the man be revered until eternity? Just the opposite is true: After bringing in the bacon, Wiedeking is being led to the slaughterhouse, squeaking for his dear life. And yet, Wiedeking's troubles are just the surface scatter of a brutal family feud that makes the War of the Roses look like flower power. They even brought in the Feds . . .

Editorial: The GM Boner Collection

Michael Milch — Sat, 09 May 2009 14:11:38 +0000

There are x+1 reasons GM is where it is today, with x being a very large number. Those reasons have been hacked and stacked here and elsewhere: a chief executive so hesitant it’s a wonder he didn’t daily swaddle himself in Cottonelle; a Board of Directors so frightened of change that they never swapped out the pine paneling and shag carpet in the board room; a union stuck so far in the past that Bakelite seems to them unspeakably futuristic. To paraphrase JFK, while success may have a thousand fathers, GM’s defeat also has a thousand fathers – and a network of 6,200 dealers.

Editorial: The Truth About Turtle Wax

Sajeev Mehta — Fri, 08 May 2009 17:20:48 +0000

All's not well with Turtle Wax. To wit: in a recent Piston Slap article, numerous commentators made less-than-flattering remarks about the brand's products and image, indicating that Turtle Wax is suffering a dramatic loss of brand equity. It's a big problem at a bad time. Last October, 3M acquired Meguiar’s. Barry Meguiar is a tireless and charismatic promoter who's deeply in tune with care care gestalt. With the normally staid Triple M's enormous resources behind him, the Divine Mr. M could put a serious hurt on Tommy the Turtle. It's time to put the terrapin's marketing under the microscope.

Future News

Frank Williams — Wed, 29 Apr 2009 16:02:37 +0000

It’s been a while since we gazed into the crystal ball to see what’s beyond the horizon on the automotive landscape. A lot has happened in the intervening eighteen months or so: GM and Chrysler are closer to bankruptcy, Ford is the only American auto company likely to survive the decade relatively unscathed, the market for hybrids peaked then bottomed out as gas prices did the same, and the only thing flowing out of Washington D.C. faster than bailout money is political BS. Join us as we check the tarot cards to see where it’ll all lead. Here are the headlines of the future.

Editorial: VeeDub Rules Ze Vorld?

Bertel Schmitt — Sat, 18 Apr 2009 14:28:18 +0000

In November 2007, VeeDub head honcho Martin Winterkorn announced his version of the Schlieffen Plan. Dubbed "Strategie 2018," Winterkorn plotted the overthrow of GM and Toyota from the top of the worldwide sales charts. Winterkorn called for VW to rule the world in sales, profits, innovation and customer satisfaction by 2018. When the plan was announced, the MSM feted it, insiders (this reporter included) rolled their eyes and denounced the announcement as the usual hubris of an incoming CEO, a suit who'd be busy collecting his pension by the time 2018 rolled around. In any case, by 2018, the Generalstabsplan would long be forgotten and superseded by at least five other grand strategies.

Editorial: The Truth About DaimlerChrysler Product Development

admin — Tue, 14 Apr 2009 13:08:57 +0000

[The following is another contribution from our anonymous ChryCo contact] I worked for Chrysler for many years in Product Development as a Design Engineer though I no longer do. I saw comments on a recent post by another employee asking why, when Chrysler merged with Daimler, did they still share platforms with Mitsubishi?

Editorial: Stein X. Leikanger’s Metaphorical Journey into KitchenAid Hell

Stein X Leikanger — Tue, 07 Apr 2009 12:33:30 +0000

The KitchenAid Espresso Pro Line - delivering 15 bars of pressure, with a separate steam unit pump. Just holding it in my hands at the store convinced me. Solid weight, no rattle. Cast iron and proper machining, no plastic cheats anywhere. I was tempted to take the lid off and peak inside, but didn't. Given what would follow I should have pulled out an Umbraco-set and given it a go.

Editorial: Cash for Clunkers Bill Heading for Trouble. One Hopes.

Robert Farago — Tue, 24 Mar 2009 14:14:28 +0000

It seems straightforward enough: federal vouchers for old clunkers. Takes old heaps off the road. Stimulates new car sales. Done. Of course, we are talking about a government program here. And that means that H.R. 1550, the "Consumer Assistance to Recycle and Save Act of 2009," has quickly become a cat fight amongst interested parties (manufacturers, dealers, dismantlers, after-market parts makers, trade protectionists, etc.). If passed, 1550 will surely evoke the law of unintended consequences. At the moment, the bill's been referred to the House Transportation and Infrastructure committee, so that august body can breathe their magic upon it. Ahead of that joyful event, 1550 contains some HIGHLY contentious sections. How about a stricture for the new car purchase that stipulates different minimum levels of highway fuel economy depending on whether the vehicle was manufactured in the United States or "North America" (i.e. Canada or Mexico)? Yes way.

Editorial: Off With Their Heads: Luxury Car Brands Under Siege

Robert Farago — Tue, 17 Mar 2009 18:22:03 +0000

On Thursday, Audi of America president Johan de Nysschen will meet with journalists to explore the question "how has the international recession impacted Audi and the luxury segment?" The obvious answer: sinking sales. The not-so-obvious conundrum: what next? How does a luxury brand position itself for survival when class war is breaking out all over? Of course, the professional pundocrats aren't using "C" word just yet. The euphemism du jour for the "where's MY bailout" anger that may or may not be sweeping the nation-- as taxpayer-owned AIG execs collect their bonuses and Bernie Madoff's wife shelters in a penthouse funded by her husband's ill-gotten gains-- is "vengeful populism." Whatever you call it, Audi and its luxury competitors are sitting in the cross-hairs of growing anti-conspicuous consumption. The recession/depression is going to kick the NSFW out of them.

The Truth About Fuel, Part One: Objects in the Mirror

Eric Stepans — Mon, 16 Mar 2009 16:43:29 +0000

America is addicted to oil. I'm sure this revelation ranks with ‘Chrysler's in a spot of bother' on the scale of surprises. Everyone from the Sierra Club to President George W. Bush has lectured the country about its dependence on oil in general, and foreign oil in particular. Pistonhead, blame thyself! Transportation fuels make up between 25 and 30 percent of total US energy demand. Needless to say, nearly all of that fraction is petroleum. Nicolas-Joseph Cugnot and the Stanley twins may have powered their jalopies on steam (even then, the Stanley Steamer was kerosene-fired), but modern vehicles are all about the distillates, baby.

Editorial: NASCAR’s Technical School for Scandal

Ronnie Schreiber — Wed, 11 Mar 2009 21:07:05 +0000

My brother fixes industrial machinery for a living. The range of skills he needs-- mechanical, electronic, hardware, software, CNC stuff, as well as troubleshooting abilities-- makes that kind of work as technically demanding as just about any job there is. You can't learn to do what he does in a university. So for-profit ventures like ITT Technical Institute, Universal Technical Institute, New Horizons computer training centers and others fill a needed role. It's understandable also that during difficult economic times those schools would market themselves aggressively to people looking for new career opportunities. There's a fine line, of course, between providing educational opportunity and exploiting people's desperation about the economy.

Editorial: Re-Inventing The American Auto Industry

Ken Elias — Mon, 09 Mar 2009 23:55:25 +0000

Today's automotive industry stands on the cusp of great change. The automobile will remain, but its powerplant will change and evolve. Within two to three decades, today's hybrid systems will look like museum pieces, as engineering resources around the world are devoted to alt power propulsion. For the United States to participate fully in this coming technological revolution, it needs a healthy automotive industry. It must fix the fundamentals...

Editorial: The New GM

Ken Elias — Thu, 26 Feb 2009 17:10:52 +0000

GM and Chrysler both must go bankrupt. Only then, out of the ashes, can a new company emerge, taking control of the best assets of both companies, with a new management team and a clean balance sheet. All financed by private equity and bank debt, not the government, and free from the political machinations that would result. It's pure business - of making and selling vehicles here in North America and in selected markets around the world. It's past time for the old empire of GM to make room for a new vision of the future based on market realities.

Editorial: Restoration Hardware

Ronnie Schreiber — Tue, 24 Feb 2009 14:33:57 +0000

What to do with all of GM's brands? That's one of the big questions that will vex the Presidential Task Force on Automobiles, as it makes its final determination on Chrysler and GM's fate. Robert Farago's branding guru Al Ries thinks The General should give Buick, Saab, Saturn, Hummer and Pontiac their discharge papers. Keep Saturn for entry level cars, Chevy for the mass market, Cadillac for luxury cars and GMC for trucks. Coincidentally, while RF was talking to his marketing maven, I was exchanging emails with Paul Earle, president and founder of River West Brands. Earle specializes in revitalizing distressed, orphaned and ghost consumer brands.

Guest Editorial: Retooling GM’s Culture, Part Four

Rob Kleinbaum — Sat, 21 Feb 2009 11:05:31 +0000

[Editor's Note: This is the last part of a four-part series by Dr. Rob Kleinbaum. Here are parts 1, 2, 3. A PDF version of the entire editorial is available, courtesy of Dr. Kleinbaum, here.]

Serious consideration needs to be given to a radically different organization that would give people overall business responsibility and accountability and increase their contact with markets and the external world. The current direction is to move away from integrated business responsibility by creating strong functions with weak business units, and the problem is compounded by making the transition slowly, so there is continual confusion and conflict over who is responsible for what. The company is doing this to "leverage its global strengths" but the real effect is to create an organization where fewer and fewer people are actually running a business or have contact with the outside world and control is becoming more and more concentrated in a few people.

My Saab Story

Stein X Leikanger — Fri, 20 Feb 2009 15:17:27 +0000

It was my last meeting with Saab. The new marketing director had decided that we were just too difficult to work with, and wanted a new team. When his predecessor introduced us to the new guy, he had no idea that we’d be working together again soon, for Lexus Europe. Meanwhile, he’d be moving on inside GM to work on the launch of the new Cadillac platform, and the later Lexus work would bring us into contact with the man who is presently heading Bentley’s sales and marketing. The car world is a small world. Back to the meeting. New guy is drawing a very sketchy car on the whiteboard.

Guest Editorial: Retooling GM’s Culture, Part Three

Rob Kleinbaum — Fri, 20 Feb 2009 11:00:03 +0000

[Editor's Note: This is the third part of a four-part series by Dr. Rob Kleinbaum. Parts one and two are still available.]

What is fascinating about GM, and offers some hope, is that it really has two cultures. The one described above is an accurate depiction of the culture in North America and Western Europe but there is another in the rest of the world that is very different. The culture of GM's operations in Asia, Latin America, Africa and Middle East, Russia and Eastern Europe, is much more progressive and it is in these areas that GM is doing very well. On almost all of the measures listed above, they would come out on the progressive side. Working for GM in Asia Pacific, Latin America or the Middle East, you would think you were in a completely different company. People are very forward looking, they are capable of making the tough decisions, they are business focused, debate is tolerated but discipline is enforced, relations with their labor force and dealers are usually positive, and authority is genuinely dispersed to the smaller business units within each of the regions.

Guest Editorial: Retooling GM’s Culture, Part Two

Rob Kleinbaum — Thu, 19 Feb 2009 12:51:48 +0000

[Editor's Note: This is the second of a four-part series by Dr. Rob Kleinbaum. Read the first part here.] The scholars Lawrence Harrison, Samuel Huntington and their colleagues have addressed the fundamental question of whether culture “matters” in how societies develop and make a compelling case that it matters a great deal. They have also outlined [...]

Guest Editorial: Retooling GM’s Culture, Part One

Rob Kleinbaum — Wed, 18 Feb 2009 20:22:02 +0000

GM has developed a plan, currently before Congress, which is supposed to demonstrate its long run viability. The company is looking at its products, brands, manufacturing footprint and capacity, health care, and "structural costs", while negotiating with the UAW to further reduce labor costs. All this is well and good but it is almost certain that GM is not addressing an issue that, in the long run, could be more important than all these others: its culture.

Editorial: Tuesday Bloody Hyundai

Jack Baruth — Thu, 12 Feb 2009 16:24:40 +0000

There's a certain raw satisfaction to be had in seeing a man go utterly, completely mad in public, particularly when there's a plateful of free bacon in front of you and an attentive server standing behind you, ready to swap your newly emptied bacon-plate for a full one at the slightest, Sotheby's-private-bidder-esque, wave of a hand. This happy spectacle was available to all and sundry at the media breakfast that opened the Chicago Auto yesterday morning, courtesy of Hyundai's American CEO, John Krafcik.

Carmageddon: Good for Business, Bad For You?

Jack Baruth — Wed, 11 Feb 2009 17:17:27 +0000

GM's ex-Vice Chairman of Global Product Development left on a sour note. Bob Lutz claimed America is a nation that hates its own auto industry. It's a remarkably nasty remark that's almost as paranoid as it is insensitive. But not quite. The truth is much more specific and the other way around: GM executives hated their own customers. Why else would they have treated them with such contempt, selling them non-competitive products and inflicting such abysmal dealer service? (Heard the news?) Never mind. GM has built some tremendous enthusiasts' cars: Corvette, G8, CTS and more. And now, the U.S. auto industry in general is about to experience a convulsive, cataclysmic change. Is that a good thing?

The Art of Noise

Martin Schwoerer — Sun, 08 Feb 2009 15:24:45 +0000

Rolls-Royce used to advertise the fact that their cars were so quiet that the loudest sound you heard was the [analog] clock ticking on the dash. Who said the British don't do hyperbole? As a quiet car connoisseur, I'd have to say a Clinton-era Cadillac provided the quietest ride I'd ever experienced; if the time was one of peace and prosperity, then so was the car. Nowadays, automakers are telling us that their cars are quiet, or at least quieter than ever before. I'm not buying it. A number of recent drives have been notable for their aural uncouthness. So I set out to find the truth about automotive sonic signatures. Has nostalgia dimmed my memory (if not my hearing)? Is progress on the noise suppression front been less impressive than industry propaganda would have you believe?

The Truth About Cash for Clunkers

Andrew Dederer — Thu, 05 Feb 2009 13:37:39 +0000

Here's a surprise: American cars hold their value much better than other major markets, including Japan and Europe. Cost of ownership is the culprit. In the US, owning a car generates relatively little in the way of year-to-year expenses. Registration is usually about $30. Inspections are infrequent and rarely costly. While the repairs required to keep a "beater" on the road can reach four figures, they rarely exceed the value of the vehicle itself. As a result, it's unusual to see a used vehicle in America (even "heaps") listed below $1k. Also as a result, the cash for clunkers proposals, as envisioned, are a horrible idea.

Editorial: General Motors Death Watch 230: “God’s Work”

Robert Farago — Wed, 04 Feb 2009 13:01:24 +0000

Post Titanic Tuesday, GM is desperate to do something, anything to move its moribund metal. I speak here not of the pricing blowouts, finance deals and BOGO offers at the sharp end. I refer to the manipulation of dealer relations. Forcing dealers to stock vehicles that no one wants to buy. Back in the day, they used to call this practice "channel stuffing." These days, they call it "pretending we're a viable business to our Congressional overlords." Automotive News [sub] reveals GM's latest contribution to the genre: the more-than-slightly-ironically named "consensus program."

Editorial: The Truth About Car Dealer Franchise Laws

Robert Farago — Sun, 01 Feb 2009 13:29:03 +0000

As a man with his finger on the pulse of the autoblogosphere, I can report that there's a groundswell of critical coverage of The Big 2.8's credibility. TTAC is no longer a lone voice. Questions are being asked. Issues raised. One of the most critical: why can't Chrysler, GM and Ford just ditch their unwanted brands? Answer: state-by-state dealer franchise laws that heavily favor the dealers-- thanks to their political clout. The Big 2.8 can't live with 'em, they can't afford to live without 'em. The Colorado Statesman's Jerry Kopel does some deep diving into this devilish dilemma and provides some important insights on this life-or-death, well, C11 anyway, issue.

Editorial: Obama Prepares GM, Chrysler for C11

Ken Elias — Wed, 28 Jan 2009 17:25:02 +0000

President Barack Obama has announced that the EPA should go ahead and review California's request to set national fuel economy standards. As reported here, California's waiver would allow the state to legislate CO2 emissions, which would create a de facto fuel economy standard under the guise of keeping the planet cool. While environmentalists and the Pelosi wing of the Democratic Party view the Golden State hat tip as a seminal victory for Mother Earth, it's actually a set up. It's all part of the Obama administration's plan to clean up the U.S. automobile industry by throwing GM and Chrysler into Chapter 11.

Editorial: Fiat Chief Visits Chrysler HQ

Andrew Dederer — Tue, 27 Jan 2009 13:55:48 +0000

The current recession has done a fair job of turning the world upside down. Instead seeing tragedy repeated as farce, we get a mega-dose of farce with the tragedy hanging over it all. Exhibit A: FIAT is in talks to take a stake in Chrysler, for nothing. Never mind the lack of palpable "investment." As Justin pointed out yesterday, this is the sort of development that would be laughed out of a producer's office. Bringing in small cars from FIAT is somehow going to rescue Chrysler? How? Making money off of small cars is not impossible in North America, but it isn't easy. More importantly, how are 150k cute little Italian job MINI's going to prop up a company with a 1.5m vehicle market footprint?

Editorial: Is Hyundai The New GM?

Edward Niedermeyer — Wed, 21 Jan 2009 23:33:56 +0000

2008 was supposed to be a banner year for Hyundai. The company predicted a huge sales jump and promised a new flagship. And then 2008 actually happened. Sales were, well, you can guess that one. From a sales and PR point-of-view, the new, V8-powered Genesis was well received. From a sales perspective, not to much. Still, as one Hyundai Marketing VP put it, "if [consumers] aren't forced to reconsider us, they won't." To paraphrase Elvis, perhaps we ought to give Hyundai a little more time. Meanwhile, the comparison between Hyundai and a young Toyota seem to have faded from view. In fact, you could make the case that Hyundai is more GM than Toyota. Well, if not you, me.

TrueDelta Does Detroit Pt. 3

Michael Karesh — Thu, 15 Jan 2009 02:00:16 +0000

First, I visited the Eco drive event in the basement. In past years, they stuck suppliers and the Chinese down here. This year, with Nissan and Porsche absent and others asking for less space, most everyone moved to the main floor. So what to do in the basement? How about a lavishly landscaped road course on which to sample hybrids and such?

The Truth About Booth Babes

Robert Farago — Tue, 13 Jan 2009 13:25:13 +0000

As Detroit's struggles prove, life is a fight for resources. If you can't get enough resources, you die. Well, in Motown's case, you receive massive taxpayer subsidies and then you die. Taking it down to the personal level, the resources needed for survival form what Abraham Maslow called "a hierarchy of needs." The most basic of these are lumped together: air, water, food and sex. Yup, sex is at the bottom of the pyramid. So it's no wonder that exhibitors at The North American International Show (NAIAS) pay young, attractive females to pose next to their vehicles. It appeals to the mostly male jobbing journos' most basic needs (after securing shrimp), drawing their attention to the automakers' vehicles. It's effective, morally reprehensible and now, self-defeating.

TrueDelta Does Detroit Pt.2

Michael Karesh — Mon, 12 Jan 2009 22:27:55 +0000

The first presentation I attended on the second day of NAIAS was for Lincoln (no mention of Mercury). The MKT crossover has a roomy interior that manages to look and feel more upscale than that of the MKS sedan. Stitched upholstery on the center stack and center console are an improvement over silver-painted plastic. As in the MKS and the related Ford Flex, seats in the first two rows are very comfortable. So what's not to love? That would be the clunky, chunky exterior.

TrueDelta Does Detroit

Michael Karesh — Mon, 12 Jan 2009 13:51:59 +0000

Well, the first day at the 2009 North American International Auto Show wasn't such a bust in the end. I began the day by attending the Intro and North American Car of the Year Awards. During the intro talk the Detroit show sought to demonstrate that it was still relevant by trotting out senior executives from the auto companies that didn't opt to skip this year's show. Among the execs from GM, Ford, Toyota, Honda, VW, and so forth was... Henrik Fisker. "Which one of these is not like the others..." started running through my head. Pretty good for a guy who reskinned SL's and 8's until he figured out it was better to ride the green gravy train. But that's the way Detroit rolls these days.

Bubblegum Death Experience: Pontiac Gets What It Deserves

Jack Baruth — Sat, 10 Jan 2009 03:11:19 +0000

"Hi Mr. Baruth. First, I would like to thank you for the opportunity to assist you and please feel free to email or call me at the number provided if you have any other questions you need answered. I have a vehicle with a MSRP of $29,995. I can sell you that for $29,482." Interesting. In the middle of the American automotive market's worst implosion in living memory, what car could possibly be so valuable, so desired, so smoking hot that the maximum negotiating room possible would amount to an ungenerous five hundred and thirteen dollars off sticker? Give up? It's a Pontiac G8. A 2008-model Pontiac G8.

It’s Always Groundhog Day in Detroit

Michael Martineck — Fri, 09 Jan 2009 19:02:01 +0000

“The first real casualty of the current recession may well be the middle-priced automobile. For years it not only provided transportation for the middle class but was a firm steppingstone on the stratified pyramid of personal material progress.” That’s from Time magazine, 1958. A different recession, in a different era. But there can be value in gazing back. That’s how we’re supposed to learn, right? To keep from doing the same stupid things over and over? Or maybe you’re more in the Conway Twitty camp. His message from the same year: It’s Only Make Believe.

Editorial: The Truth About Saturn

David Holzman — Tue, 06 Jan 2009 18:31:54 +0000

When I went car shopping in the early ‘90s, my priorities were fun-to-drive, reliability, and economy. Style— not so much, or so I thought. But the first time I saw a Saturn, I knew instantly what it was, although I’d never seen a photo, since the car was conspicuously absent from the ads. As soon as Consumer Reports gave Saturn a preliminary blessing for reliability, I gave it my consideration. Ultimately, I became so smitten that I didn’t bother to re-look at the Integra after I discovered to my great chagrin, in the dealer’s lot, that the turning circle was nearly as big as the namesake planet’s diameter.

Automotive Darwin Awards 2008

Ronnie Schreiber — Sun, 04 Jan 2009 12:09:32 +0000

There are all sorts of end of the year automotive lists. The ten best this and the ten worst that. My favorite list is not a car gong per se. The Darwin Awards are given to those who improve the gene pool by removing themselves from it. As you might imagine, automobiles figure prominently in this roll call of death by stupidity. To wit: Ivece Plattner of Italy. Plattner was driving a Porsche Cayenne (which is already a bit of a red flag), stuck in traffic on a railroad crossing, waiting for the light to turn green. When the crossing barriers came down, they trapped the Cayenne.

Editorial: Cars And Currencies

Bertel Schmitt — Sat, 27 Dec 2008 12:12:10 +0000

Imagine your sell someone a house. It's hard to imagine, I know, but humor me. You settle on a million. You sign. Papers are shuffled, titles researched. Three months later, at the closing, you get a check for $780K. Imagine there's nothing you can do. Your lawyers are shrugging their shoulders. $220K poof, gone. The same happens every day in international trade. Welcome to the strange world of world currencies. You sell something in Euro, Yen, Won or Rupees. You ask: "How much is that in real money?" And a few days later, it's all changed. Such is the life of a global automaker.

Editorial: Naughty And Nice: A Christmas List For The Manufacturers Who Didn’t Get Bailed Out

Jack Baruth — Wed, 24 Dec 2008 14:19:57 +0000

My parents had many ways to traumatize me during my childhood holidays. Perhaps the most effective: taking me downtown to donate a hundred bucks to the local Ronald McDonald House. Don’t get me wrong; the charity could well be the best (only?) reason to eat a Filet-O-Fish. But a hundred bucks? That kind of money could have bought two copies of “Star Raiders” for the Atari 800. As it turns out, I’m not the only spoiled brat to resent a bit of charity, as the following Christmas list proves. It’s straight from my top-secret sources at the North Pole: a complete recap of what the more fortunate manufacturers are asking Santa for this year. We’ll start with Toyota.

Good News for NAIAS! Good News for Detroit!

Ronnie Schreiber — Mon, 22 Dec 2008 18:58:14 +0000

Last Friday was a good news day for Detroit. No, I'm not talking about President Bush's loan package. That wasn't so much good news as a stay of execution, with a case on appeal. And it wasn't shadenfreude. What joy can anyone in the auto biz take from the reports that previously invincible Honda is losing money and cutting production? Or that Prius sales are down 50 percent, Toyota has suspended work on their proposed Prius plant in Mississippi, and the company will have a loss this fiscal year, the first in 71 years? No, the good news came, from all places, The Michigan legislature.

Editorial: The Real Honda is in Real Trouble

Jack Baruth — Sat, 20 Dec 2008 17:11:55 +0000

“La plus belles des ruses du diable est de vous persuader qu'il n'existe pas.” Baudelaire, straight out of The Usual Suspects. And while the world focuses on the usual suspects of the auto-industry collapse, something odd is happening over in a shadowy corner: Honda is running scared. It’s been less than four months since the Civic sold more than fifty-two thousand units in a single month, toppling the almighty F-150 from its two-decade-long run as the best-selling vehicle in the United States, but if anybody at the Big H is celebrating, they’ve apparently decided to hide their exuberant light under a bushel of program cancellations, production cutbacks, and a panicky sale of their backmarking F1 team. Why? Surely, if anybody’s in good shape to survive the coming catastrophe, it’s Honda; they have the small cars people “want,” unimpeachable planet-friendly credentials, and a solid base of non-union production. What’s causing them to huddle behind their hurricane shelters? The answer’s simple: when it comes to Honda, reality is very, very far away from the public perception.

Editorial: Wither Detroit?

Ken Elias — Mon, 15 Dec 2008 19:18:20 +0000

It’s that time of the year when industry pundits [usually] run out of news. Normally, this leads to retrospective reflection and informed speculation. The autoblogosphere has been pretty bad at this, of late. They missed carmageddon more or less completely, treating Detroit's BS like the Lord's own gospel. That said, TTAC has offered its share of botched timelines and devil-may-care details. One nice, unforeseen twist: Ford. CEO Alan Mulally flew in from Seattle and kicked some Blue Oval butt. As a result, I give FoMoCo a chance of making it-- albeit a shot rather than a dead cert. Ford must withstand the fallout to come, as GM and Chrysler head for bankruptcy. Now that's for sure-- regardless of the automakers' progress on Capitol Hill of Pennsylvania Avenue. While I'm at it, I'll go out on a limb and make some more predictions for 2009.

U.S. Car Sales: The Unlucky Number Will Be 13

Bertel Schmitt — Sun, 14 Dec 2008 19:00:13 +0000

Many have been guessing what annual U.S. car sales would amount to this year. Some confused souls predicted sales as low as 10m. J.D.Power now has the pretty firm conviction that the year will end with 13.2m light vehicles sold for the year in the United States, down 18.5 percent from 16.2m in 2007, says [...]

Editorial: Bailout Watch 234: The Truth Will Set Them Free

Ken Elias — Wed, 03 Dec 2008 20:33:53 +0000

TTAC could have saved Congress a ton of time and billions of dollars if the politicos had just read these pages over the last few years. We’ve diagnosed the patients, begged them to seek help, outlined some cures, and prayed that our worst fears would never be realized. And yet, here we are – in the midst of the biggest industrial meltdown of all times for the US auto industry. So again, we’ll just try to neatly summarize the actions that Congress needs to take now. It’s not pretty, probably isn’t politically correct, and will piss off a whole bunch of people. We’re hoping to influence you – our audience – to spread the word to ensure that Congress makes the right moves. After all, this is a democracy. The press – which includes TTAC – can make a difference in getting to the truth, and that’s what Congress needs to know today.

Editorial: Does Detroit Have The Will To Succeed?

Ken Elias — Tue, 25 Nov 2008 15:20:03 +0000

Detroit's financial predicament today rests squarely on the shoulders of its executive leadership going back nearly four decades. The American auto industry failed mostly in its will to succeed in a changing business environment marked by the entrance of new competition, adoption of new technologies, and demands for greater fuel efficiency. Had Detroit taken those actions necessary to be leaders, rather than laggards, its overall situation of falling market share, reputation for poor quality (in comparison to certain foreign competitors like Toyota and Honda mostly), and weakening financials might have been avoided.

Editorial: Tomorrow, Porsche Will Disclose Their VW Plans. Any Bets?

Bertel Schmitt — Tue, 25 Nov 2008 15:15:09 +0000

If you think about flying to Stuttgart tomorrow, better book now. It will be a full house tomorrow at Porsche's annual "Bilanzpressekonferenz." The presentation of annual numbers to the press. At this confab, the information-hungry media will be fed with finger food and glossy brochures, drowned in champagne and a sea of PowerPoint charts. Why would anyone be interested in a small maker of sports cars that was nearly bankrupt when Wendelin Wiedeking took over? How did P.J.O'Rourke put it so nicely? "In the gutter in front of the razed crack houses was a brand-new Porsche 928 flipped on its back and wadded like Kleenex." That was then, this is now. Now, Wiedeking promises to reveal his timetable for the takeover of Volkswagen. "Waitaminute," I hear you say. "Don't they own VeeDub already?" Not exactly. Currently, Porsche holds 42.6 percent of the common stock of Volkswagen. It is also written that Porsche owns 31.5 percent in VW options, strike price and time to expiration unknown. Will Wiedeking say tomorrow when they'll finally go for the whole shebang? We doubt it. Will they go over 50 percent this year, as planned? Will they go to 75 percent soon as rumored? We believe, Wiedeking will keep everybody guessing. Despite the fact that Porsche is rolling in money, they are Swabian. And then ...

Editorial: Customer Care

Michael Karesh — Sun, 23 Nov 2008 13:59:15 +0000

The most ardent fans of Detroit accuse those who don’t buy domestic cars of being disloyal, if not downright un-American. But loyalty only makes sense when it runs in both directions. And Detroit has not been loyal to Americans, whether they be its workers, its suppliers, or its customers. But, assuming General Motors and Ford survive the current crisis, it’s not too late. Let’s focus on car buyers. What might Detroit do differently to deserve our loyalty? Well, a few things. But the most significant would be providing customer care that deserves the name. Most of those who refuse to “Buy American” do so because they were burned by an “American” car, sometimes multiple times. In these cases, not only did the car require too many repairs—which was bad enough in itself—but the manufacturer did little or nothing to accept responsibility for the design or manufacturing defect and take care of the affected car buyer. If Detroit does nothing to assist car buyers when design or manufacturing defects lead to expensive repairs, then why should car buyers support Detroit when it needs assistance? Read on ...

Editorial: Between the Lines: Pelosi/Reid Letter to Detroit

Ken Elias — Sat, 22 Nov 2008 12:49:33 +0000

So, the Motown millionaire's beggars' banquet blew town, retreating from Washington's corridors of power to their Detroit lairs to lick their wounds. To say the CEOs of Chrysler, Ford and GM were unsuccessful in their televised attempts to "liberate" $25b from the Troubled Asset Recovery Program would be like saying the Detroit Lions are struggling to get to the Superbowl. In many ways, it was over before it started. The CEOs arrived woefully unprepared, and left with admonishments to return next month after, how do I put this delicately, getting their shit together. House Speaker Nancy Pelosi and Senate Leader Harry Reid switched into CYA mode. As part of their campaign, they've written a letter to Detoit, telling that what needs doing the second time 'round. Having secured a copy of this missive, TTAC contacted our own Ken Elias to read between the lines on your behalf. As the automakers run out of cash, it all comes down to this.

Editorial: Detroit Bailout = Thermonuclear, Intergalactic Trade War

Bertel Schmitt — Sat, 22 Nov 2008 10:50:46 +0000

There may be another nasty aspect to the bailout: a full-scale trade war, launched by countries that don't (or even do) bail out their auto industries themselves. Bloomberg writes that "a U.S.-triggered spate of global carmaker-bailout proposals may spark trade disputes over whether the Americans are unfairly trying to subsidize their industry." Egged-on by the US bailout money that may, or may not, or may, or may not be in the offing, manufacturers all over the globe are holding up their tin cups. At the same time, the European Union threatens to lodge a complaint against any U.S. bailout on the grounds that it's unfair to the auto makers in the rest of the world, not to mention Renault, Fiat, Volkswagen, Daimler, BMW et al. China also may complain, although their complaints will ring a bit hollow, as the government owns most of the big automakers already. Probably won't stop them. "Now that we are in the WTO, we might as well use it." Payback is a bitch.

Editorial: Redlining the Domestics

Michael Martineck — Fri, 21 Nov 2008 23:37:52 +0000

Loans and leases are getting hard to come by for anyone interested in a car or truck from GM, Chrysler or Ford. Banks now routinely put out lists with “red lines” through makes and models they no longer want to finance. Those products are increasingly domestic in origin. Redlined vehicles are harder to sell, forcing down values, rendering loans even more unattractive, making those cars and trucks even harder to sell, forcing down... you can see where this is going. Major lenders in the US are not waiting for The Big 2.8 to file for bankruptcy. They’re treating them like it’s a done deal.

Editorial: The Battle At Midday. How America Can Win The War Against GM

Bertel Schmitt — Fri, 21 Nov 2008 14:29:42 +0000

Informa Global Markets (IGM) "is a world-class international supplier of real-time news and analysis to market professionals in the fields of foreign exchange, sovereign fixed income and corporate bonds." It's the stuff brokerage houses and investment bankers pay a lot of money for in order to look smart with their clients. Would definitely bust TTAC's budget. Some of my friends in high finance still hold a job, and one of them (you know who you are) was nice enough to forward me yesterday's IGM "Markets At Midday" issue. Reads like "Markets At Midway." With the appropriate ending: The bad guys lose.

Editorial: Bailout Watch 223: Planes, Trains and Automobiles

Robert Farago — Thu, 20 Nov 2008 13:39:27 +0000

While Detroit News columnist Daniel Howes gently chides Motown's hometown heroes-- even as they continue to bleed to death all over his carpet-- The Washington Post's Dana Milbank kicks the Big 2.8's CEO while they're down. But good. The WaPo scribe warms-up with a few gentle toe jabs, simply repeating the Big 2.8's testimony regarding their recent travel arrangements. "There's a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hands,' Rep. Gary L. Ackerman (D-N.Y.) advised the pampered executives at a hearing yesterday. 'It's almost like seeing a guy show up at the soup kitchen in high-hat and tuxedo. . . . I mean, couldn't you all have downgraded to first class or jet-pooled or something to get here?" Fortress Detroit please note: no one mentioned the rejuvenating possibilities of a "convenient plane crash." Oops.

The LA Auto Show Must Go On. Mustn’t It?

Adrian Imonti — Thu, 20 Nov 2008 03:16:39 +0000

Auto shows are intended to be recipes for excess. Take one excessively large convention hall, fill it to capacity with excessive quantities of costly chrome and metal, mix in a few brigades of excessively attractive women, and cap it off with a cadre of excessively awkward journalists (present company excepted, er, we hope) to glorify the results with excessively vapid superlatives. But that was before Carmeggedon and the Great Credit Crunch of ’08 came to town, raining on the parade with an excessively nasty vengeance. Cars are a serious business, and 2008 is looking to be about as serious as it gets.

Editorial: Bailout Watch 220: “We’ll Be Back;” Chrysler’s Dead; Where’s Barack? Here’s the Bill

Robert Farago — Wed, 19 Nov 2008 01:13:10 +0000

The table of Motown's CEOs facing Senator Christopher Dodd at today's Senate Banking, Housing and Urban Affairs Committee Hearing looked more than a little like The Last Supper. If only. When Senator Bob Corker (R, TN) pressed Ford, Chrysler and GM's top suits for a pledge that they won't be back for more money-- should they be granted $25b in taxpayer-backed loans-- only GM CEO Rick Wagoner answered. And then Red Ink Rick waffled, pegging his promise to an economic upturn that no one believes imminent. It was the moment when Motown's begging bowl brigade went seriously south, in that oh-so-public C-Span sort of way.

Editorial: Bailout Watch, German Edition, Vier: Merkel To Opel: “You Wait Until Mommy Comes Home!”

Bertel Schmitt — Sun, 16 Nov 2008 07:44:19 +0000

This weekend's G20 meeting was pretty much a non-event. A Bretton Wood it was not. While German Chancellor Angela Merkel and her Finance Minister Peer Steinbrueck were still in DC, an urgent e-mail was sent to Carl-Peter Foster, chief of GM Europe. Also on the To: line: Hans Demant, head of GM's German Opel subsidiary. They were ordered to get their glutei maximi to Berlin. They were furthermore told to bring Opel's workers council chief Klaus Franz along. Bloomberg reports that the sit down's set for the Kanzleramt, right after mammy comes home and emerges from her Airbus 310 (named "Konrad Adenauer," after Germany's first chancellor, who's busy rotating in his grave).

Editorial: Bankruptcy Watch 189: Poll Position

Edward Niedermeyer — Fri, 14 Nov 2008 22:09:42 +0000

In December of last year, a certain Peter Hart wrote an opinion column for Fairness And Accuracy In Reporting (FAIR). Hart decried the prevalence of polling in political coverage. Not only did he cast aspersions on the accuracy and reliability of polls, he identified them as a sinister threat to no less than "American Democracy." "The more fundamental problem for the press — and for American democracy —" wrote Hart, "is that the media's overreliance on polls encourages a kind of political conversation that prioritizes strategic consideration and tactics over substance." He didn't know how right he was. Today, Peter Hart Associates released the results of a poll of their own, gauging support for an auto industry bailout. Read the results in the Detroit News and you might be surprised. Read the poll itself and the Hart Associates client list, and that surprise should evaporate faster than Mr Hart's ideals regarding polls and their cynical abusers.

Is the American automobile industry worth saving? Pt. 2

Robert Farago — Thu, 13 Nov 2008 19:31:19 +0000

The question presumes that A) Detroit’s ailing automakers ARE America’s automobile industry and B) using our tax money to protect Ford, GM and Chrysler from their own incompetence would benefit the U.S. car industry. Not true, on both counts. And by ignoring the flawed assumptions underpinning the argument for raiding the average American’s wallet, bailout proponents are misleading what they condescendingly call “Main Street.” To which I say no, no, and Hell no.

Is the American automobile industry worth saving?

Ken Elias — Wed, 12 Nov 2008 17:34:40 +0000

Do we need an American automobile industry? And by American, I mean those manufacturers, suppliers, and associated vendors owned and operated by US citizens – red blooded, football-loving, meat and potato types. (Ok, that’s a stereotype, but you know who I’m talking about.) I submit that it’s in our national interest to keep it alive and moving forward. Farago disagrees completely (editorial to follow).

Editorial: In Search of: Honda’s Hybrids

Steven Lang — Tue, 11 Nov 2008 12:35:57 +0000

Once upon a time, Honda represented everything that Detroit was not. Efficient, lean, reliable and most of all, innovative. While The Big Three soldiered-on with the same powertrains for decades on end, Honda constantly renewed, redesigned and released cars that genuinely improved their customer's lives. Profits and widespread admiration followed... until the Honda hybrids came along. Then Honda, long regarded as the technology leader, got its ass kicked by Toyota. What happened?

Editorial: How to Give GM DOE Loans AND Protect Taxpayers

Robert Farago — Sat, 08 Nov 2008 15:48:01 +0000

[Another one from our anonymous bankruptcy lawyer.] I've had a look at the rules for the $25b Department of Energy (DOE) direct loans for development of advanced technology and manufacturing facilities. To qualify, an automaker must prove that it is solvent. Either that or it must meet one or more of the stated tests that relate to financial liquidity-- tests that can be met even if the automaker is insolvent on a balance sheet basis. In announcing its huge third quarter loss, GM has made a statement that suggests that it may not meet the liquidity tests and may not qualify for the DOE direct loans.

Editorial: Why the GM/Cerberus/Chrysler Bailout is bad for taxpayers and doomed to fail without the benefits of a Chapter 11 filing for both Chrysler and GM

Robert Farago — Thu, 06 Nov 2008 17:59:08 +0000

[The following analysis was sent to TTAC by a New York City bankruptcy lawyer who wishes to remain anonymous. It's twice as long as our usual editorial, but I think you'll find it's well worth your time. Thanks to you-know-who-you-are.] Cerberus Capital, a highly secretive NYC-based vulture investment fund, wants the U.S. government and taxpayers to bailout its failed investment in Chrysler and its failing investment in GMAC. Its partner in this raid on the US Treasury is General Motors, a woefully insolvent automobile manufacturer whose CEO is paid $40k each day. Here's why a bailout for GM and/or Chrysler is a bad idea.

Editorial: Things Are Not Always What they SEMA

Edward Niedermeyer — Thu, 06 Nov 2008 10:48:38 +0000

Environmental exploitation is here to stay. Even the threat of industry collapse has failed to take the collagen out of American automaker's eco-friendly lip service. In this they are hardly alone. The litany of firms running advertisements professing their undying love for our Mother Earth, and building concept cars to show their unconsummated devotion, continues apace. 2008 is the first year that the SEMA has set aside a portion of its annual show for green trendiness. It's not a concept that sits well with the show's ethos of excess. But never underestimate the power of hypocrisy. And America's ability to co-opt controversy to unite our society under the banner of the almighty buck. Amen.

Editorial: A Funny Thing Happened on the Way to Bankruptcy…

Robert Farago — Wed, 05 Nov 2008 18:52:51 +0000

Back when the “first” Detroit bailout bill was headed for the President’s desk, U.S. automakers scrambled to justify their $25b call on the public purse. Read the goddamn label, they cried. It’s a LOAN. For building FUEL EFFICIENT CARS. Meanwhile, Michigan Senator Stabenow displayed the political instincts for which she is rightly famous. “It’s about jobs, jobs, jobs,” the Debster decried. Well exactly. And thanks to “jobs, jobs, jobs,” the domestics will get a second, third, fourth and fifth turn at the taxpayer trough. But first, there’s a little business to take care of: Cerberus.

Editorial: So… SEMA’s Boring Eh? Well, MAYBE NOT

Edward Niedermeyer — Wed, 05 Nov 2008 14:17:40 +0000

I waited all day for the fear to take hold. Wandering through a parking lot jammed with alien whips, I wondered when the icy fingers would make contact with my sun-baked scapulae. But it never came. As the desert sun faded to dusk and Las Vegas slowly came to life with humming neon, I couldn't help but take what alcoholics call a searching and fearless moral inventory. What had robbed these ferociously unnecessary monuments to excess of their terrifying power? Were they too much at home in glittering Babylon, little more than tiny microcosms of the glaring titans that loom over the Vegas Strip? Or had some infectious irony (gone pandemic in the face of national malaise) landed in this last bastion of shallow glitz, reducing each glittering status symbol to so much light parody? Or was I (and the creators of these mechanical beasts) simply preoccupied with said malaise, and the seemingly inevitable national transformation which has only now, as I write from my hotel room, been officially realized? Nobody goes to Vegas seriously expecting answers, but was a little existential fear now too much to ask for too?

Editorial: How Porsche NSFWed the Hedge Funds

Bertel Schmitt — Mon, 03 Nov 2008 19:45:44 +0000

So you thought Porsche financed the VW takeover by foisting overpriced floormats and trucks on their well-heeled buyers? Yesterday’s issue of Die Welt, Germany’s conservative newspaper, thinks different. They undug the dirt on Porsche’s takeover-machinations of Volkswagen. It’s a story that makes Cerberus look like a frisky puppy. It’s an account that makes banks and hedge funds look like morons.

Editorial: American Leyland: The GM – Chrysler Bailout That’s Guaranteed To Fail

Justin Berkowitz — Wed, 29 Oct 2008 14:34:49 +0000

After the initial media support for a potential GM-Chrysler hookup (e.g. Jalopnik.com's Ray Wert), the bandwagon began to roll like a snowball down the proverbial mixed metaphor hill, and everybody soured on the deal. We even charted how individual commentators changed their positions and eventually "threw Chrysler to the Wolves." In Monday's New York Times, Andrew Ross Sorkin said that GM CEO Rick Wagoner's continued employment is a "minor miracle." But the commentatorati are still behind the curve re: the government's rumored $10b "intervention" in the GM - Chrysler merger. In the main, they have't even acknowledged that the bailout is happening. That, and the critical fact that it's structurally designed to fail.

Editorial: General Motors Death Watch 203: GMAC Headed for Bankruptcy

Ken Elias — Thu, 16 Oct 2008 14:26:58 +0000

GMAC will go bankrupt. The U.S lending giant is cut off from all lending sources. Smart depositors will flee its small bank (relative to GMAC itself). And its majority owner, Cerberus, won’t save it. It’s a pure liquidation play now-- with the bank going into FDIC receivership, maybe as soon as this Friday. Whether or not all Hell will break loose is an open question, with many answers...

How to Make Money From GM’s Chapter 11

Ken Elias — Wed, 15 Oct 2008 16:26:19 +0000

There are winners in every financial disaster. There are always a few folks-- heroes or scoundrels depending on how they make their profits-- who understand that the Chinese symbol for danger and opportunity are one and the same. GM’s impending bankruptcy (and likely Ford as well) will produce some winners. But not without serious financial and psychological risk to those who seek their fortune from misfortune. For those of you with a robust constitution, here's one potential game plan for GM's C11. First, some background for those uninitiated in the ways of the American automobile business...