The Truth About Cars » Industry http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Thu, 17 Apr 2014 14:00:20 +0000 en-US hourly 1 http://wordpress.org/?v=3.8.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Industry http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com/category/news-blog/industry/ Too Big To Fail, Too Confused To Operate: Analysis Of 619 Pages Of Cobalt Engineering Documents [w/ Full Text] http://www.thetruthaboutcars.com/2014/04/too-big-to-fail-too-confused-to-operate-analysis-of-619-pages-of-cobalt-engineering-documents-w-full-text/ http://www.thetruthaboutcars.com/2014/04/too-big-to-fail-too-confused-to-operate-analysis-of-619-pages-of-cobalt-engineering-documents-w-full-text/#comments Thu, 17 Apr 2014 14:00:20 +0000 http://www.thetruthaboutcars.com/?p=799138  

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The House Energy & Commerce Committee recently released the documents GM submitted for investigation, which includes emails and internal reports documenting GM’s response to reports of their early Chevrolet Cobalt and Saturn Ion models inadvertently shutting the car “off” while driving due to an ignition cylinder that was, simply, too easy to turn out of the “run” position; and in the case of several accidents, allowed the ignition cylinder to rotate out of the run condition before or during accidents, causing the airbags to not deploy when required.

The documents, totaling 619 pages (some with repeat info), reveal just how deep seated “old GM” was in their cost cutting ways (Driving down supplier costs to the point of sacrificing quality, admittedly poorly designed ignition cylinder, and removing internal quality control on the parts), and just how blind sided “new GM” was during their investigations. It also confirms how suspended engineers Ray DeGiorgio and Gary Altman were involved in the ignition switch response, and fuzzy problem solving. Full text and an analysis of key documents below.

We already know the basics of how this happened, but it’s still surprising just how ingrained GM was in putting the issue aside. The key issues are these:

  • GM became aware of the ignition issue in the 2001 preproduction Saturn Ion and the 2005 preproduction Chevrolet Cobalt.
  • Gary Altman initiated the report that lead to the insert, and Ray DeGiorgio consulted on the fix and argued against ignition switch changes.
  • Many different options were proposed, including suggestions from Delphi.
  • Cost played a major role in the decision to not recall the ignition switch early on.
  • The later key insert was the result, and was seen not as a fix, but as a “containment.”
  • GM also had very little oversight on parts from Delphi, only relying on Delphi’s incomplete testing.
  • GM’s engineers knowingly put the cars to market with a defective ignition switch.
  • This lead to ISB #05-02-35-007.
  • In 2006, DeGiorgio eventually signed off on design changes for Delphi, that included a stronger spring and plunger for the detent mechanism in the ignition cylinder, which provides a physical resistance between the different key positions.
  • When implemented in 2007, the new ignition cylinders cost less than a dollar per unit more than the original design; $400,000 to retool the production lines. These are the same changes that were deemed “not an acceptable business case” in 2005
  • As company, however, no one knew who signed off on the change until the Melton family lawsuit.
  • In court, DeGiorgio testified that he was unaware of changes to the ignition cylinder that would have effected the detents, only mentioning the key change..
  • Later investigations showed that the Cobalt had a substantial number of airbag warranty claims.
  • Higher level GM representatives broadsided by NHTSA’s investigations and disapproval of their slow reaction to other recent recalls.

First up, Gary Altman’s and Ray Giorgio’s role in the ignition cylinder issue is a problem. In court, Altman claimed that he did not feel that the Melton’s car was “unsafe.” This coming after submitting the initial mechanical complaint about the ignition falling out of run, in 2004:

docs.house.gov meetings IF IF02 20140401 102033 HHRG-113-IF02-20140401-SD017.pdf
During the investigation, several different approaches to modify the ignition cylinder were brought up to DeGiorgio. All of which were quickly dismissed by DeGiorgio, because the switch was already “very fragile,”

docs.house.gov meetings IF IF02 20140401 102033 HHRG-113-IF02-20140401-SD017.pdf (1)
Later on, all fixes were dropped, as it wasn’t deemed necessary. With a tight deadline and budget, the engineers could not justify any of the fixes at the time, as it wasn’t an “acceptable business case.”

docs.house.gov meetings IF IF02 20140401 102033 HHRG-113-IF02-20140401-SD017.pdf (2) docs.house.gov meetings IF IF02 20140401 102033 HHRG-113-IF02-20140401-SD017.pdf (3) docs.house.gov meetings IF IF02 20140401 102033 HHRG-113-IF02-20140401-SD017.pdf (4)

In 2006, DeGiorgio finally signed off on a design change for Delphi. The design change included  a stronger spring and longer detent plunger to increase the force needed to switch the key between different positions, along with an unrelated electrical upgrade. In an unexplained move, DeGiorgio did not assign a new part number to the improved switch design. The design change added 90 cents to the parts cost, and about $400,000 in tooling costs.

 

cobalt report 3
docs.house.gov meetings IF IF02 20140401 102033 HHRG-113-IF02-20140401-SD047.pdf (1)

But, with this large of a role in the decision to delay the redesigned ignition switch, DeGiorgio claimed that he was not aware of any mechanical changes to the switches during his testimony in the Melton family suit against GM:

docs.house.gov meetings IF IF02 20140401 102033 HHRG-113-IF02-20140401-SD056.pdf
Though, he did sign off on the changes, and worked with Delphi to test batches of ignition cylinders that contained an upgraded PCB (Printed Circuit Board), and detent plunger:

cobalt report 14

democrats.energycommerce.house.gov sites default files documents GM-Commodity-Validation-Sign-Off-2006-4-26.pdf

 

Curiously enough, though, is that GM had very little oversight on Delphi’s quality control, and Delphi did not check the rotational torque needed to turn past the switches detents. GM simply accepted Delphi’s parts and trusted their QC. But with rumored tensions between GM and Delphi, it’s said that cost cutting measures might be to blame as GM forced Delphi to push prices down, sacrificing parts quality. If this were true, GM’s choice to outsource QC to the supplier left them in the dark for too long, preventing them from seeing the immediate effects of their problems with Delphi:

cobalt report 4cobalt report 18

While this was going on, GM released the key insert as a “containment solution;” it would be the minimum needed to alleviate the problem for effected customers. This was chosen over two other modifications to the ignition cylinder, which were seen as a “partial solution” in the case of adding an additional detent mechanism to add more resistance to rotating the key out of park, and a “sure solution” involving moving the ignition switch higher up on the column, using a gear drive system to reach the rotary switch responsible for selecting which electrical circuit to run on. The added gearing would also increase rotational torque, the design stated.
cobalt report 11
cobalt report 12cobalt report 13
In 2007, the NHTSA began to probe into the surprising number of airbag-related complaints, despite “GM’s indications that they see no specific pattern.”
cobalt report 15

The issue was set aside, for the most part, until GM was informed by the Melton suit that there was a possible design change in the switch, based on an investigation into junkyard-found switches from the effected models. The testing showed that there was a noticeable change in detent torque, but no documentation from GM to show the changes. The GM engineers and representatives in the case were caught off guard by this design change, and began an internal investigation. This investigation lead GM engineer Brian Stouffer to find the documents that showed DeGiorgio signing off on design changes with no part number change.

cobalt report 5cobalt report 16
Finally, the most impressive point of this story comes from GM’s reactions to the NHTSA’s investigations. The NHTSA emailed GM asking for clarification on several other recalls, documenting GM’s reactions to other product issues with a disdain for GM’s penchant for doing the least amout possible to avoid full recalls; ie: regional recalls for parts failures in the rust-belt states. Saying that some were broadsided by this information would be an understatement:

cobalt report 19[...]
cobalt report 19

The response by Mike Robinson, VP for environment, energy and safety policy, sums up GM’s perception and confusion over their responses to the Cobalt issue, and several other poor recall responses in the past. “This note from NHTsA, both the content and tone, comes like a bolt out of the blue,” he states, “We worked way too hard to earn a reputation as the best and we are not going to let this slide.”

cobalt report 19
To summarize, GM is its own worst enemy. They responded poorly to incredibly early reports, dismissing the issue too quickly as a casual problem. With reports going back to 2001, during the Saturn Ion development, there is no reason why the switch should have come unmodified to the Cobalt development; never mind the dismissal of the problem before the car was produced. Ray DeGiorgio’s role in this problem is larger than he initially lead on in the Melton case, though his motive in this discrepancy is unknown at this time.

Full text to all 619 pages can be find here.

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QOTD: Volkswagen Golf GTD Looking Less Likely For America – Is The Audi A3 To Blame? http://www.thetruthaboutcars.com/2014/04/qotd-volkswagen-golf-gtd-looking-less-likely-for-america-is-the-audi-a3-to-blame/ http://www.thetruthaboutcars.com/2014/04/qotd-volkswagen-golf-gtd-looking-less-likely-for-america-is-the-audi-a3-to-blame/#comments Thu, 17 Apr 2014 13:42:47 +0000 http://www.thetruthaboutcars.com/?p=802082 2014-volkswagen-golf-gtd

Despite promises of the Volkswagen Golf GTD making its way to America, Automotive News is reporting that the prospect of VW’s diesel hot hatch arriving in America is looking like a dim prospect.

According to AN, the high output version of VW’s 2.0L TDI engine can’t be built in Volkswagen’s Mexican factory that supplies the engines for Golf in North America (though it does build the standard TDI engine). Although VW wouldn’t elaborate, the cost of the GTD (factoring in the engine, which would have to be imported from Germany), would make the GTD cost prohibitive for North America.

On the other hand, VW will have no less than three additional hatchbacks for North America: a lower priced version of the Golf TDI, a TDI Golf Sportwagen and the Audi A3 TDI Sportback. Given the small market share for diesels, it’s possible that Volkswagen is satisfied that these models will sufficiently cover the diesel hatchback market in America.

Previous, VW was projecting that the GTD would account for as much as 10 percent of Golf TDI sales. But it’s possible that VW was scared off by a last-minute product plan change over at Audi. The A3 TDI Sportback wasn’t initially planned for America, but enthusiast demand apparently spurred Audi to import it to America.

The A3 TDI will likely run close to the GTD’s projected $27,000 price tag – close enough that VW may have been worried about cannibalization between the two cars. Unlike Europe, America has neither the demand for diesels, hatchbacks or manuals (the A3 TDI is only offered with a dual-clutch transmission) to support two similarly priced entrants with little differentiation.

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New York 2014: Chevrolet Makes Trax With New B-Segment Crossover http://www.thetruthaboutcars.com/2014/04/new-york-2014-chevrolet-makes-trax-with-new-b-segment-crossover/ http://www.thetruthaboutcars.com/2014/04/new-york-2014-chevrolet-makes-trax-with-new-b-segment-crossover/#comments Wed, 16 Apr 2014 05:18:32 +0000 http://www.thetruthaboutcars.com/?p=799298 2015-Chevrolet-Trax-7_edited-1

 

It’s impolite to gloat, but we called the introduction of the Chevrolet Trax back in March. It’s nice to be right once in a while.

Using the same underpinnings and 1.4L drivetrain as the Buick Encore, the Trax will go up against the Jeep Renegade, Nissan Juke, Honda Vezel and other entrants in the subcompact crossover segment. The Korean-made Trax is already on sale in Canada, starting at about $17,000 USD. That price probably won’t change much when it comes to America. Though versions with AWD and more equipment will get pricier.

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Toyota Looking To Conquer Africa http://www.thetruthaboutcars.com/2014/04/toyota-looking-to-conquer-africa/ http://www.thetruthaboutcars.com/2014/04/toyota-looking-to-conquer-africa/#comments Tue, 15 Apr 2014 11:58:19 +0000 http://www.thetruthaboutcars.com/?p=798514 Toyota Land Cruiser 79 Bakkie

Though Toyota already has a presence in South Africa, the automaker is eyeing the last untapped market in the world: The African continent.

Automotive News reports Toyota patriarch Shochiro Toyoda gave his son, current president Akio Toyoda, a mission last year to explore markets outside of the “Asia-Europe-America” sphere, especially those where the younger Toyoda had not visited. His travels took him to a knockdown factory in Kenya, where there are 40 cars per 1,000 people according to IHS Automotive, laying the early groundwork for an all-out campaign to get as much of the final frontier as possible.

Success in the market may have to come in the long term, however; IHS predicts GDP per capita in Sub-Saharan Africa won’t reach the threshold of $3,000, as well as the ownership rate of 70 units per 1,000 people, until 2030 at the earliest. Toyota Africa CEO Johan van Zyl, who is scouting for new factory locations outside of South Africa, knows this reality well:

It’s a growing market, a market with a future. We have quite an ambitious [annual sales] target. But we must also understand, this is not going to happen overnight. We have to put the right things in place. And that is what we are busy doing, to ensure that we have the right foundation for the business in the future in Africa.

In the meantime, the automaker will launch the Quest compact in South Africa next month. The Quest — based upon the previous-gen Corolla — will help boost production towards full capacity at Toyota’s Durban plant; while max capacity is 220,000 annually, current production is 160,000 units per year. Unlike many auto makers, Toyota is not pursuing a new brand or platform for their new, low-cost car.

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Cadillac Flagship, Redesigned LaCrosse To Be Made In Detroit By 2016 http://www.thetruthaboutcars.com/2014/04/cadillac-flagship-redesigned-lacrosse-to-be-made-in-detroit-by-2016/ http://www.thetruthaboutcars.com/2014/04/cadillac-flagship-redesigned-lacrosse-to-be-made-in-detroit-by-2016/#comments Tue, 15 Apr 2014 11:30:16 +0000 http://www.thetruthaboutcars.com/?p=798938 2013 Cadillac Elmiraj Concept

In light of General Motors’ recent announcement of a $384 million investment in its Detroit-Hamtramck Assembly Plant, two vehicles from Cadillac and Buick could wind up being produced alongside the next-generation Volt.

Edmunds reports IHS Automotive senior analyst Stephanie Brinley expects Cadillac’s all-new flagship to be produced in late 2015, with the Buick LaCrosse — currently assembled in Fairfax, Kan. — joining the flagship in 2016 for the latter’s next redesign.

Though GM hasn’t said much about the flagship, industry insiders claim the vehicle will be aimed at the Audi A8, BMW 7 Series, Lexus LS and Mercedes S-Class, and may be priced as much as $100,000.

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US Energy Department Unveils Four-Year Strategy For Alternative Energy http://www.thetruthaboutcars.com/2014/04/us-energy-department-unveils-four-year-strategy-plan/ http://www.thetruthaboutcars.com/2014/04/us-energy-department-unveils-four-year-strategy-plan/#comments Tue, 15 Apr 2014 11:15:27 +0000 http://www.thetruthaboutcars.com/?p=798026 South_Point_Wind_Farm

The U.S. Department of Energy unveiled last week a four-year plan that would advance the goal of energy security by building upon as many alternative sources as possible, further reducing dependence on imported petroleum.

Autoblog Green reports the 27-page plan illustrates the proposed aims of the DOE to double the amount of energy produced by renewables, improve battery technology, usher in advances in biofuels and hydrogen fuel cells, and push further electrification of vehicles.

In addition, the DOE also has strategies ready for testing the nation’s nuclear deterrent for safety, security and overall effectiveness, as well as boosting the tools needed to bring improvements on the nation’s security infrastructure.

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GM Internal Investigation Hindered By Corporate Culture http://www.thetruthaboutcars.com/2014/04/gm-internal-investigation-hindered-by-corporate-culture/ http://www.thetruthaboutcars.com/2014/04/gm-internal-investigation-hindered-by-corporate-culture/#comments Tue, 15 Apr 2014 10:58:40 +0000 http://www.thetruthaboutcars.com/?p=798970 GM Next

Bloomberg reports now-former General Motors engineer Brian Stouffer conducted a two-year internal investigation into the out-of-spec switch at the heart of the automaker’s current recall crisis, only to find confusion and resistance along the way to finding answers as to why vehicles up through 2008 were stalling out. In addition, Stouffer reported to three different executives assigned to the investigation in one year as it moved along, as well as the lack of sufficient cases that met the criteria required. Only in late 2013, when Delphi responded to Stouffer’s inquiry by providing the document showing the changes made to the switch back in 2006, did the investigation come to a head.

Automotive News posits that the link between the out-of-spec switch and the 13 fatalities under the spotlight may have been muddied under other circumstances focused upon the drivers involved, ranging from being unbelted and driving under the influence, to speeding and lack of experience behind the wheel. Further, both police and the National Highway Traffic Safety Administration didn’t immediately make the link between the switch and undeployed airbags, the former citing numerous instances and the various reasons behind each failure.

Though it would appear as though GM were the new kings of recalls as of late, Boston-based used-car shopping site iSeeCars compiled data of the top 15 automakers who sold vehicles in the United States between 2005 and 2014, and found the automaker among the middle of the recall list with 96 recalls for every 100 vehicles sold. Toyota took the No. 1 spot with 167 recalls per 100 sold, while Mercedes-Benz took last place with 38 per 100.

Within GM, public relations head Selim Bingol and human resources chief Melissa Howell have both left the automaker “to pursue other interests.” The departures are not related to the recall crisis, according to spokesman Greg Martin, explaining the exits as “a part of any transition where the CEO makes changes and puts together her leadership team.” That team will now consist of John Quattrone, who will head the human resources department CEO Mary Barra ran until 2011, while head of investor relations Randy Arickx will serve as interim PR chief until a permanent replacement is found.

Finally, The Wall Street Journal reports Opel may finally break even ahead of a 2016 target date after years of seeing red. The charge toward equilibrium is being cautiously led by CEO Karl-Thomas Neumann, whose changes to the company — including the closure of a plant in Germany, a $6 billion investment in Europe, and the introduction of 23 models by 2016 — have helped Opel see a rise of 3 percent in European Union sales during the first two months of 2014. The news follows similar signs of hope for GM overall, as Automotive News adds Cadillac’s and Buick’s first-ever wins in J.D. Power & Associates’ 2014 Customer Service Index, as well as the Chevrolet Equinox/GMC Terrain twins being the only two midsize SUVs to receive a “good” rating by the Insurance Institute for Highway Safety in the small-overlap test as small victories for the automaker.

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QOTD: At What Price Connectivity? http://www.thetruthaboutcars.com/2014/04/qotd-at-what-price-connectivity/ http://www.thetruthaboutcars.com/2014/04/qotd-at-what-price-connectivity/#comments Mon, 14 Apr 2014 15:36:17 +0000 http://www.thetruthaboutcars.com/?p=797689 Caterham_7_Roadsport_SV

From this week’s Automotive News, editor Jason Stein talks to former Hyundai CEO and now TrueCar board member John Krafcik about connected cars

“Do you notice that as we talk about increased connectivity in the car, we are also talking about being less connected with the car?” Krafcik asks through a phone line. “Connectivity and autonomy. Sounds like those are at odds with each other, hey?”

Krafcik, who owns a Caterham and a Porsche 911, is one executive who can speak with authority on the inverse relationship between in-car connectivity and feeling a connection with one’s automobile. Unfortunately, we seem to be moving inexorably towards the “connected car” model, at the expense of feeling connected to our cars – and most people don’t seem to mind one bit.

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New PSA Boss Tavares Prepares To Rebuild Company http://www.thetruthaboutcars.com/2014/04/new-psa-boss-tavares-prepares-to-rebuild-company/ http://www.thetruthaboutcars.com/2014/04/new-psa-boss-tavares-prepares-to-rebuild-company/#comments Mon, 14 Apr 2014 14:15:58 +0000 http://www.thetruthaboutcars.com/?p=797482 Carlos Tavares

Though PSA Peugeot Citroen secured funding in a three-way deal between itself, the French government and Dongfeng, new boss and former Renault COO Carlos Tavares has a hard road ahead of him as he rebuilds the ailing automaker.

Reuters reports Tavares will focus using the joint venture it shares with Dongfeng to go after 1.5 million sales by 2020, bring exports to Southeast Asia and establish a research center. He will also tighten up both working capital and the number of models sold in each market, as well as squeeze savings from PSA’s suppliers.

However, development woes, pricing issues on some models, and the use of heavy discounts and incentives are all roadblocks on Tavares’ “Back in the Race” plan expected to be issued in full Monday, as well as currency challenges in Latin America and Russia and lower-cost products from around Asia.

As part of the plan, Tavares is expected to halve the number of models it currently offers. On the bright side, the 308 and 2008 both delivered a combined 5.2 percent sales increase in the first two months of 2014, as well as an 8.5 percent Q1 2014 gain over PSA’s home market.

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Dealers Still Waiting For Replacements, DeGiorgio Linked To Original Design And Upgrade http://www.thetruthaboutcars.com/2014/04/dealers-still-waiting-for-replacements-degiorgio-linked-to-original-design-and-upgrade/ http://www.thetruthaboutcars.com/2014/04/dealers-still-waiting-for-replacements-degiorgio-linked-to-original-design-and-upgrade/#comments Mon, 14 Apr 2014 14:00:51 +0000 http://www.thetruthaboutcars.com/?p=797362 GM ignition diagram

Automotive News reports dealers are still waiting for the ignition switches meant to replace the out-of-spec switch at the center of the ongoing recall crisis at General Motors. The switch was to have arrived at dealerships beginning this week, yet most dealers are in a “holding pattern” on deliveries. Once the parts do arrive, service bays will begin work on affected customer vehicles immediately before turning toward the used lot, where vehicles under the recall are currently parked until the customer vehicles are fixed.

As for GM seeking help from NASA with its woes, however, The Detroit Bureau learned from NASA Deputy Associate Administrator for Communications Bob Jacobs that his employer “is not working with General Motors on its ignition switch issue”; a separate source claimed “low-level” discussions between the two were taking place, but hasn’t gone any further thus far. He added that while NASA would be more than willing to help GM, a formal request would require some coordination between the agency and both the National Highway Traffic Safety Administration and the Justice Department so as to not interfere “with their own, ongoing investigations of the GM ignition switch recall.”

Speaking of the Justice Department, Reuters says five senators, including Richard Blumenthal of Connecticut and Barbara Boxer of California, penned a letter asking Attorney General Eric Holder to “intervene in pending civil actions to oppose any action by GM to deny responsibility for damages”:

We write to request your immediate intervention and assistance on behalf of victims of severe damage – financial harm, physical injury, and death – resulting from serious ignition switch defects in General Motors (‘GM’) cars.

The aforementioned actions may be in reference to the liability shield erected upon the automaker’s 2009 exit from Chapter 11 bankruptcy, where “New GM” is only responsible for the claims linked to the switch from June 2009 forward.

That division within the company may be more of a thin line than a 4-inch-thick steel plate, however, as Autoblog reports an investigation by the House Energy and Commerce Committee uncovered an email exchange between the NHTSA and GM last July to discuss the latter’s “indifferent attitude toward safety issues” face-to-face. The agency cited the automaker’s slow response to urgent matters and preference toward regional recalls over full recalls as two examples of GM not having changed much since leaving bankruptcy.

Bloomberg adds the agency itself didn’t do enough to take GM to task on its attitude toward safety, though, based on a memo unearthed by the committee regarding airbag failures on a number of Chevrolet Cobalts and Saturn Ions with warranty claims being four times’ higher than similar competitors. The decision to investigate those claims was rejected by a review group within the NHTSA, believing the airbag issue “did not stand out” among other incidences of failure.

Automotive News reports the committee also found an email chain that ties GM engineer Ray DeGiorgio — who denied having knowledge of the April 2006 change to the ignition without a change to the part number — with said change. In short: DeGiorgio signed-off on both changes to the spring and plunger to help prevent the slipping issue now linked to 13 fatalities and 33 accidents, as well as on the decision to retain the original number issued to the part he designed for the Saturn Ion as his first project for GM in 2001.

Regarding the Ion, Reuters says the troubled development of the compact vehicle — and the equally troubled relationship between GM and supplier Delphi — may have laid the groundwork for the current recall crisis. The supplier alerted the automaker about the out-of-spec switch, but fearing an embarrassing introduction, money issues, and the possible wrath of then-vice chairman of product development Bob Lutz, GM pressed ahead with the switch as-is.

 

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Wash. Governor Inslee Signs Pro-Tesla Legislation, Hackers Find Ubuntu Inside http://www.thetruthaboutcars.com/2014/04/wash-governor-inslee-signs-pro-tesla-legislation-hackers-find-ubuntu-inside/ http://www.thetruthaboutcars.com/2014/04/wash-governor-inslee-signs-pro-tesla-legislation-hackers-find-ubuntu-inside/#comments Mon, 14 Apr 2014 13:45:11 +0000 http://www.thetruthaboutcars.com/?p=797458 Ubuntu_GNOME_13.10_ScreenShot

Automotive News reports Washington state governor Jay Inslee signed legislation that would allow Tesla to continue with its direct-sales business model within the state while also clarifying current law that favors traditional franchise dealership networks by preventing other automakers from following in Tesla’s path. The EV automaker thanked the state government “for supporting a culture of innovation and ultimately making the right decision for consumers” with the introduction of the bill into law.

In other government news, the California Air Resources Board is considering cutting EVs priced at $60,000 and above from the agency’s Clean Vehicle Rebate Program as funding continues to run low, according to Capitol Weekly. Though the move would be temporary, the cap would push-out both the Cadillac ELR and Tesla’s Model S and upcoming X, a move that Tesla feels is disappointing:

[CARB] aims to paint Tesla as the sole purveyor of EVs (electric vehicles) to the wealthy, while disregarding the fact that individuals of similar affluence may still continue to receive a rebate by purchasing a different EV.

Finally, Autoblog Green reports a group of tech-savvy Tesla owners have dug into their EV’s console via its exposed Ethernet connector, discovering a subsystem powered by Linux distribution Ubuntu. The individual behind the dig, known only as ‘nlc,’ was contacted by the automaker through its service center, warning him that his exploration could void his car’s warranty should he persist.

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Honda Pursues 70k Annual US Fit Sales http://www.thetruthaboutcars.com/2014/04/honda-pursues-70k-annual-us-fit-sales/ http://www.thetruthaboutcars.com/2014/04/honda-pursues-70k-annual-us-fit-sales/#comments Mon, 14 Apr 2014 13:30:26 +0000 http://www.thetruthaboutcars.com/?p=797498 2014-honda-jazz-2015-honda-fit-photo-gallery-medium_17

In 2008, Honda sold nearly 80,000 Fit subcompacts to the United States, and is preparing to move 70,000 annually from the lot to the driveways of America thanks to its new Celaya, Mexico plant.

Ward’s Auto reports the automaker had a difficult time hitting the milestone set in 2008 due to production constraints at home and fervent demand abroad. With the new plant, however, Honda will be able to make 200,000 Fits annually, as well as the Fit-based crossover set to begin production later this year.

As for who Honda expects will buy the 70,000+ Fits aimed for the U.S. market — aside from lifestyle bloggers — product planner Hiroaki Hamaya says the subcompact is already “capturing the highest household income and percentage of college grads.” Data from J.D. Power bears this out: Fit buyers hold an average income of $75,000 while 64 percent of them have graduated college. However, median age and percentage of buyers under 35 currently lag behind competitors such as the Ford Fiesta and Chevrolet Sonic.

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Ontario Government Selling GM Shares To Fund Public Transit http://www.thetruthaboutcars.com/2014/04/ontario-government-selling-gm-shares-to-fund-public-transit/ http://www.thetruthaboutcars.com/2014/04/ontario-government-selling-gm-shares-to-fund-public-transit/#comments Mon, 14 Apr 2014 13:00:34 +0000 http://www.thetruthaboutcars.com/?p=794802 r-GM-CANADA-RD-INVESTMENT-large570

The government of Ontario has announced  it will sell its shares in General Motors as part of an effort to fund new public transit programs in the Greater Toronto Area. But the move could end up hastening the demise of GM’s Oshawa plant, located in the same metropolitan area.

According to The Globe and Mail, the sale could net about $1.4 billion for the province, which would “wait over the next year for the best time to sell.” While divesting its stake isn’t necessarily a bad thing, the timing of the sale coincides with two events that have a major impact on Oshawa’s future.

The first is the expiration of GM’s Vitality Commitment, a document signed during the bailout as part of the terms for receiving government funds., which requires GM to keep 16 percent of production in Canada until GM’s loan to the Canadian and Ontario government is re-paid, or until December 31, 2016, whichever comes first.

With the loans repaid, and GM’s shares now being sold off, the biggest question mark for Oshawa will be the expiration of GM’s contract with Unifor (formerly the CAW), which will expire in 2016, along with Unifor’s Ford and Chrysler contracts.

Oshawa has slowly seen its product whittled away, most recently losing the Chevrolet Camaro to Lansing, Michigan where the Cadillac ATS is built. As of now, the Flex Line (one of two assembly lines) has no unique product, with the Cadillac XTS and Chevrolet Impala also built in Michigan, the Buick Regal is also built in Germany and the Chevrolet Equinox/GMC Terrain are made in multiple locations.

The Consolidated Line, which builds the old W-Body Impala for fleets, is due to be shut down in 2016. The big question is whether the Flex Line will follow. The 2016 date may provide an easy out for GM, since it can use the labor contract expiry to close down Oshawa.

The plant’s closing would be a devastating blow to Oshawa, which is just as much of a “GM Town” as Flint, Michigan was in the “Roger & Me” era. Of the Detroit Three plants currently operating in Ontario, Oshawa has been in jeopardy the longest – but at this point, it’s an inevitability.

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Lexus Reveals Its Most Important Product Since The LS400 http://www.thetruthaboutcars.com/2014/04/lexus-nx200/ http://www.thetruthaboutcars.com/2014/04/lexus-nx200/#comments Sun, 13 Apr 2014 17:56:01 +0000 http://www.thetruthaboutcars.com/?p=796402 01-lexus-nx-concept-1

Lexus is launching their long awaited small crossover at this month’s Beijing Auto Show. Dubbed the NX, it will be the first Lexus product with a turbocharged engine.

Aside from the 2.0T engine, a naturally aspirated NX200 and an NX300h hybrid (which shares its powertrain with the Lexus ES300h) will also be offered. Exact specs haven’t been announced.

For TTAC readers, the NX is a non-event, another boring crossover to add to the ever-growing pile of soulless two-box vehicles that should be wagons. But for Lexus, this is a vitally important product, a competitor in the booming small crossover segment.

In Europe, Lexus has traditionally been an also-ran, fielding a lineup of cars that are considered uncompetitive thanks to thirsty gasoline engines, a dearth of diesel options and a lack of compelling reasons to pick one over a rival luxury brand. The NX is their best hope at changing things.

The small crossover segment could not be hotter, and if the pricing is right, Lexus might be able to make some headway against the Mercedes-Benz GLA, BMW X1 and Audi Q3. The lack of a diesel won’t help, but the hybrid version might do well due to low CO2 emissions, even though hybrids traditionally have not done well on The Continent. In markets like China, Russia and Brazil and India, the diesel conundrum is less important. What matters is the “premium” perception that goes along with the Lexus brand and CUVs in general. The NX won’t break new ground in quality and value like the LS did – but it might just kick off a second wind for the brand in the markets that matter most.

 

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Toyota Unveils New Duo Of Fuel-Efficient Engines http://www.thetruthaboutcars.com/2014/04/toyota-unveils-new-duo-of-fuel-efficient-engines/ http://www.thetruthaboutcars.com/2014/04/toyota-unveils-new-duo-of-fuel-efficient-engines/#comments Fri, 11 Apr 2014 10:30:57 +0000 http://www.thetruthaboutcars.com/?p=793594 1.3L_gasoline_engine

Toyota has unveiled this week two new fuel-efficient gasoline engines that will serve as the basis for as many as 14 global powerplants by 2015, and boost economy by 10 percent.

Automotive News reports the two engines — 1.3-liter four-pot and 1-liter three-pot — are Atkinson cycle powerplants co-developed with partner Daihatsu, and feature fuel-efficiency goodies such as EGR, VVT and stop-start technology.

On the power front — especially since Atkinson cycle engines are more known for their efficiency than for destroying ‘Ring times — the Toyota engines will deliver high compression ratios of 13.5 for the larger engine, 11.5 for the smaller. In turn, thermal efficiency in the duo will hit a maximum of 38 percent and 37 percent, respectively.

As for where the duo and their children will reside, expect the home market to have the first crack via the automaker’s line of non-hybrid compacts before taking the global stage the following year in both non-hybrid and hybrid vehicles, as well as larger premium offerings.

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Wolff Out, Woodhouse In As Lincoln Design Director http://www.thetruthaboutcars.com/2014/04/wolff-out-woodhouse-in-as-lincoln-design-director/ http://www.thetruthaboutcars.com/2014/04/wolff-out-woodhouse-in-as-lincoln-design-director/#comments Fri, 11 Apr 2014 10:00:54 +0000 http://www.thetruthaboutcars.com/?p=793642 Max Wolff, Lincoln Exterior Design Chief

The Lincoln division of Ford has replaced former design director Max Wolff with David Woodhouse, the former head of the Blue Oval’s Premier Automotive Group, as part of the premium division’s $1 billion makeover.

Bloomberg reports Wolff will remain with Lincoln as the brand’s exterior design boss, and that the change occurred in December with little fanfare, as Ford no longer issues press releases for promotions below the vice president level, according to spokesman Stephane Cesareo. Both design chiefs were brought over from General Motors to Ford, with Wolff arriving in 2010 from Cadillac, and Woodhouse from GM’s design studios in 1999.

Wolff’s biggest mark on Lincoln is the current MKZ, which he reworked immediately upon arrival in 2010. Though the premium sedan — based upon the Ford Fusion — faced production problems that saw the overall brand’s sales fall to a low not seen in over 30 years, the MKZ’s success boosted Q1 2014 sales to 36 percent.

Aside from his styling work with PAG, Woodhouse was in charge of Ford’s advanced design studio in California between 2004 and 2009, and guided Lincoln’s strategy between July through December of 2013 before becoming the brand’s new director of design.

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UAW Subpoenas Haslam, Corker To Appear At VW NLRB Appeal Hearing http://www.thetruthaboutcars.com/2014/04/uaw-subpoenas-haslam-corker-to-appear-at-vw-nlrb-appeal-hearing/ http://www.thetruthaboutcars.com/2014/04/uaw-subpoenas-haslam-corker-to-appear-at-vw-nlrb-appeal-hearing/#comments Fri, 11 Apr 2014 09:30:50 +0000 http://www.thetruthaboutcars.com/?p=793666 Governor_Bill_Haslam

Tennessee governor Bill Haslam and U.S. Sen. Bob Corker are just two of the 20 prominent Tennessee witnesses subpoenaed by the United Auto Workers to appear at the union’s hearing before the National Labor Resource Board later this month, where the UAW will appeal the results of the organizing election held at the Volkswagen plant in Chattanooga back in February of this year.

The Detroit News reports the 20 witnesses subpoenaed are ordered to bring emails and documents related to a state government incentive made to VW in the aim of bringing production of a planned midsize SUV to Tennessee. Outgoing UAW president Bob King defended his union’s decision:

The purpose of the NLRB’s investigation is to determine the truth concerning the third-party interference in the February election at Volkswagen’s Chattanooga plant. The NLRB’s rules call for the use of subpoenas as part of this truth-seeking exercise. The UAW hopes that all parties who receive subpoenas will fully comply by providing the NLRB with the requested documents and with their testimony.

The action comes on the heels of an exposé conducted by Nashville CBS affiliate WTVF-TV regarding documents linking the Haslam administration to an incentive proposal made to the German automaker on the alleged condition the plant in Chattanooga remain unorganized; the proposal was withdrawn in January ahead of the election.

Among the others subpoenaed by the UAW include Tennessee house speaker Beth Harwell, economic development commissioner Bill Hagerty, and anti-tax activist Grover Norquist.

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GM Seeks Aid From NASA, Issues New Ignition-Related Recall http://www.thetruthaboutcars.com/2014/04/gm-seeks-aid-from-nasa-issues-new-ignition-related-recall/ http://www.thetruthaboutcars.com/2014/04/gm-seeks-aid-from-nasa-issues-new-ignition-related-recall/#comments Fri, 11 Apr 2014 09:00:47 +0000 http://www.thetruthaboutcars.com/?p=793690 gm-headquarters-logo-opt

Autoblog reports 2.19 million of the same vehicles under the current General Motors ignition recall are under a new ignition-related recall, as well. The new recall warns of a problem where the key can be removed without the switch moved to the “off” position. According to GM, the automaker is aware of “several hundred” complaints and at least one roll-away accident resulting in injury, and is instructing affected consumers to place their vehicles in park or, in manuals, engage the emergency brake before removing the key from the ignition until repairs are made.

Regarding the original recall, The Detroit News reports has called upon NASA’s Engineering & Safety Center to review whether or not the 2.6 million affected Chevrolets, Pontiacs and Saturns are safe to drive with just the ignition key in position. The agency, which has performed similar reviews in the past, will look over the work performed by the automaker in the latter’s effort to make the affected vehicles safe to drive, as well as review its overall approach to safety concerns.

On the financial front, Automotive News says GM will take a $1.3 billion charge in Q1 2014 for the original recall, 40 percent greater than the $750 million charge originally estimated at the end of last month. The charge — which includes repair costs and loaners for affected owners — comes on the heels of a $400 million charge tied to currency challenges in Venezuela, the total sum of which threatens to knock out most if not all of the automaker’s Q1 2014 earnings set to be announced toward of end of this month.

Meanwhile, The Detroit News reports Michael Carpenter, the CEO of former GM financial arm Ally Financial, says his company will complete its exit from government ownership by Election Day of this year:

The U.S. Treasury is quite happy today. My own view is they will definitely be out before the election and we are close to having Treasury and U.S. government ownership in the rearview mirror.

By the end of trading Thursday, Ally’s IPO netted taxpayers $17.7 billion with a profit of $500 million on the $17.2 billion bailout of the consumer finance company, while the Treasury currently holds 17 percent of its remaining shares after selling 95 million for $25 per share at the opening bell; share price fell 4.4 percent to $23.50 at the closing bell.

In lawsuit news, Automotive News reports GM settled with the families of two Saturn Ion drivers who lost their lives in 2004 when their respective cars’ airbags failed to deploy. The two fatalities were identified by the publication as the earliest of 13 linked to the out-of-spec ignition switch at the root of the current recall crisis. In addition, while one case was settled out-of-court in September of 2007, the second case drew its settlement terms after the automaker filed for bankruptcy in June of 2009, placing the plaintiffs and their lawyer with other unsecured creditors.

The Detroit News reports Cadillac and Buick are at the top of their respective lists for dealer service satisfaction as determined by the J.D. Power & Associates U.S. Customer Service Index Study. Cadillac’s dominance over the luxury brand category comes as former No. 1 Lexus — who held the top spot for five consecutive years — falls to third behind Audi, while Buick leads Volkswagen, GMC, Mini and Chevrolet in the mass-market brand category.

Finally, Autoblog reports the last of eight Corvettes swallowed by the sinkhole that formed inside the National Corvette Museum in Bowling Green, Ky. back in February has been recovered. The 2001 Corvette Mallett Hammer Z06 will need extensive work performed to bring it back to its original state, but not before it joins its brethren in a new exhibit entitled “Great 8″ beginning next week. The exhibit will last until the museum’s 20th anniversary in late August, at which point GM will begin restoration work on the eight Corvettes.

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GM Fined $28k By NHTSA, Places 2 Engineers On Paid Leave http://www.thetruthaboutcars.com/2014/04/gm-fined-28k-by-nhtsa-places-2-engineers-on-paid-leave/ http://www.thetruthaboutcars.com/2014/04/gm-fined-28k-by-nhtsa-places-2-engineers-on-paid-leave/#comments Thu, 10 Apr 2014 14:56:25 +0000 http://www.thetruthaboutcars.com/?p=793305 Rencen. Picture courtesy GM

Associated Press reports General Motors has placed two engineers on paid leave as “an interim step” in the investigation conducted by former U.S. attorney Anton Valukas. Spokesman Greg Martin declined to name the two engineers in question.

The Detroit News reports GM has been fined $28,000 by the National Highway Traffic Safety Administration for failing to answer in full by the April 3, 2014 deadline the 107-question survey sent to the automaker regarding the recall of 2.6 million vehicles with an out-of-spec ignition switch linked to 13 fatalities and 33 accidents. Furthermore, the agency will fine GM $7,000/day so long as the automaker continues to fail to comply with the inquiry in full, and may call in the Justice Department to sue GM for answers and fines.

As for how this came to pass, GM says it couldn’t provide all of the answers as the outside investigation by Valukas had yet to be completed. Meanwhile, spokesman Greg Martin defended the automaker’s response to the survey, citing the millions of related documents already delivered to the NHTSA as proof of compliance.

The agency may not be alone in its dimming view of GM, however, as concerns running through Wall Street have sent price targets of GM stock downward amid gloomy forecasts of rising costs, diminished earnings and other challenges outside of the recall crisis. Analysts for Morgan Stanley and RBC Capital Markets have dropped their target prices of $49 and $47 per share to $33 and $46, respectively, with the former downgrading GM stock to “underweight.”

Without the crisis, however, the automaker still has rough seas ahead after emerging from government ownership, with Wall Street fearing for the long-term future of GM in the face of strengthening Japanese automakers — bolstered by a weakened yen — dependency on its joint ventures in China, problems in Europe and other international markets, and domestic challenges from Ford and Tesla.

In other financial news, Bloomberg reports former GM financial arm Ally Financial’s exit from U.S. Treasury ownership would allow Ally to take on more subprime auto loan borrowers. The finance company currently holds 11 percent of its portfolio in such loans, and at $25/share in its IPO, the $2.83 billion raised would give Ally a boost in attracting more subprime borrowers.

However, both CreditSights Inc. analyst Jesse Rosenthal and independent banking consultant Bert Ely shared concerns regarding the finance company’s reliance on auto loans, especially in the subprime market, citing the lack of diversification other consumer-finance companies or large banks possess in weathering the credit risk subprime auto lending could bring. Bloomberg adds that Ally’s relationship with GM — 39 percent of its lending and leasing portfolio came from the automaker in 2013 — could add an additional risk in light of the latter’s ongoing recall crisis.

Finally, Automotive News presents a history of failure between GM and its suppliers over the functionality of the ignition switch in Chevrolet Cobalts and Saturn Ions, leading to numerous changes, complaints, claims and, a decade later, a recall crisis that may bring more pain than the automaker could bear.

The first problem — Ion owners not being able to start their vehicle in cold weather — prompted the 2004 redesign currently linked to the recall, then quietly changed in April 2006 when the second and third problems — Cobalt owners not being able to shut off their vehicle unless they accidentally bumped their knee into the ignition — led to the conclusion by two engineers that the switch was mounted too low, and that it was “falling apart.”

Furthermore, in the deposition given by engineer David Trush in the case regarding the 2010 death of Brooke Melton behind the wheel of her Cobalt, Trush stated GM had its supplier at the time make replacement parts for the first ignition problem alongside a service bulletin asking dealers to install the new part in affected cars; the automaker changed suppliers in 2008, citing deficiencies in quality and production in the former supplier.

Lastly, nearly two years before the recall in April of 2012, GM began offering to replace the switch on 2007 – 2009 Cobalts and Pontiac G5s and 2008 – 2012 HHRs for free, citing a “binding condition” with the cylinder and its housing which could prevent basic functionality of the ignition system.

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More Trade-Ins Pulled Underwater As Negative Equity Level Rises http://www.thetruthaboutcars.com/2014/04/more-trade-ins-pulled-underwater-as-negative-equity-level-rises/ http://www.thetruthaboutcars.com/2014/04/more-trade-ins-pulled-underwater-as-negative-equity-level-rises/#comments Thu, 10 Apr 2014 13:00:30 +0000 http://www.thetruthaboutcars.com/?p=793233 01-cadillac-dealership4

As more consumers trade-in their old vehicles for a newer model, a growing number of consumers are owing more on their trade-in than their vehicle’s actual worth.

Automotive News reports a gradual rise in negative equity among trade-ins beginning in Q3 2011 according to information from the Power Information Network. At that time, 22 percent of trade-ins were upside down; however, by Q1 2014, the percentage reached 27.3 percent after hitting 25.9 percent and 23.6 percent in the first quarters of 2013 and 2012, respectively.

The cause? Longer loan terms of 73 to 84 months (and now, beyond), increased subprime borrowing, and declining values in the used-car market as negative equity takes hold.

Regarding the aforementioned loan terms, Experian Automotive said the loans were the fastest growing category in Q4 2013 compared to the previous year, taking 20.1 percent of the new-car market and 23 percent of used-car retail volume in comparison to 19 percent and 12.5 percent respectively in Q4 2012. However, PIN senior director Thomas King explained that while 73+-month loans should be watched carefully, the only consumers who suffer from being upside down are those who roll the negative equity in their trade-ins into the next vehicle repeatedly.

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European-Style Octane Could Boost Efficiency, Power In US Engines http://www.thetruthaboutcars.com/2014/04/european-style-octane-could-boost-efficiency-power-in-us-engines/ http://www.thetruthaboutcars.com/2014/04/european-style-octane-could-boost-efficiency-power-in-us-engines/#comments Thu, 10 Apr 2014 12:45:24 +0000 http://www.thetruthaboutcars.com/?p=793257 Octane

Should United States gasoline octane standards be updated to match those in Europe, fuel efficiency could see a significant improvement, along with increases in engine power.

Ward’s Auto reports the Detroit Three powertrain bosses laid-out their case for increasing octane ratings before attendees at this year’s SAE World Congress. In short, by matching ratings with those in Europe — where the highest rating is 95+ — engineers could build engines for higher compression, leading to increases in fuel efficiency and power instead of the losses in both found in engines made for the U.S. market, where the highest rating available is 91.

The idea has precedent, as diesel fuel was brought in line with European standards seven years ago, with improvements to both engines and emissions as a result.

Though the Detroit Three bosses brought the issue up with the Department of Energy and various power players within the Beltway, only now have they brought it before the public, as Ford chief Bob Fascetti explains:

I can’t say we’ve actually lobbied together, but it’s a common-sense thing. If we had a single-octane fuel that was higher, then we can take advantage of that for the customer, we can implement higher compression ratios and we won’t be knock-limited on the fuel. It’s win-win for the innovators as well as for the customers.

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Future Ford Explorers, Expeditions Could Wear All-Aluminium Bodies http://www.thetruthaboutcars.com/2014/04/future-ford-explorers-expeditions-could-wear-all-aluminium-bodies/ http://www.thetruthaboutcars.com/2014/04/future-ford-explorers-expeditions-could-wear-all-aluminium-bodies/#comments Thu, 10 Apr 2014 12:36:08 +0000 http://www.thetruthaboutcars.com/?p=793281 Explorer Sport rear quarter, picture courtesy Michael Karesh

As previously reported by TTAC earlier this year, future Ford Explorers and Expeditions could one day wear aluminium bodies.

Edmunds reports the SUVs could easily go aluminium should Ford decided to do so based on the higher base prices of both vehicles being able to sustain the higher cost of the metal. The Explorer and Expedition could see improved fuel economy from the several hundreds of pounds lost as a result.

Alongside aluminium, Ford also aims to improve the engines, transmissions and aerodynamics in their lineup as the automaker seeks to reduce CO2 emissions annually by 4 percent to meet ever-stringent global standards.

The earliest an all-aluminium Explorer or Expedition could come is 2018, as the U.S. metals industry is stepping up aluminium production in anticipation of more Ford products extensively using the lightweight metal.

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Shai Agassi’s Dream Has Gone To A Better Place http://www.thetruthaboutcars.com/2014/04/shai-agassis-dream-has-gone-to-a-better-place/ http://www.thetruthaboutcars.com/2014/04/shai-agassis-dream-has-gone-to-a-better-place/#comments Thu, 10 Apr 2014 12:00:01 +0000 http://www.thetruthaboutcars.com/?p=791801 BP_Renault_Fluence_ZE_Israel_Jan_2012

The death of the Renault Fluence ZE earlier this year marked the final chapter in the story of Better Place, the failed Israeli start-up that attempted to bring battery-swappable electric cars to the mainstream.

The Fluence ZE was supposed to be the vehicle that launched Better Place in Israel, the home country of CEO Shai Agassi, who envisoned the country as an ideal trial market for his vision of all-electric motoring. Given Israel’s contentious relations with its OPEC neighbors, the relatively short driving distances and the high cost of both vehicles (largely through exorbitant taxes) and fuel, it seemed like an ideal location to roll out Better Place.

But as Fast Company‘s wonderful post-mortem feature shows, what should have been a challenging but conceptually straightforward play was doomed to fail via a deadly cocktail of hubris, nepotism and incompetence.

The launch of the network was met with the kind of hyperbolic spin typical of venture-backed startups. “Disruption” and a desire to change the world, driven partly via ego and partly via socially conscious motivations, were important parts of the Better Place narrative. From my perspective, there are parallels to the founding narrative of the modern State of Israel – Agassi sought autonomy and independence from petroleum products and the often hostile countries that produced them. He wanted to “make the desert bloom” (to steal a quote from David Ben-Gurion, Israel’s first Prime Minister) with Better Place swap stations, that would enable users to swap out their dead batteries in a matter of minutes, and be on their way, criss-crossing the tiny country without any carbon emissions or range anxiety. Aside from the ill-fated Sabra, Israel had no tradition of automotive innovation. But at the time, start-up culture, and Israel’s success in the tech world, were popular narratives, and Agassi’s venture was primed to ride that particular wave.

The infrastructure that created modern Israel was rooted in a mix of both Jewish communal values and a healthy dose of collectivist agrarian ideology. Agassi, on the other hand, is painted as a narcissistic showman, an Israeli Steve Jobs, but without the wherewithal that Jobs possessed, one that allowed him to overcome his massive character flaws and change the consumer electronics space forever.

Author Max Chafkin paints a picture of nepotism (Agassi’s brother was in charge of building the battery swap stations, despite having zero experience or knowledge), arrogance (Chafkin details how BMW and Mercedes “gave [Better Place] the finger” after bad encounters with Agassi) and overall poor judgement. A meeting with GM was even more disastrous, with Agassi walking out after GM executives relentlessly picked holes in his logic.

Fast Company is a tech focused publication, and Chafkin’s piece strays more towards that audience than an auto-savvy one, but he still manages to touch on a major point that few have been able to discuss: the sometimes oil-and-water relationship between tech and autos.

Carmakers, especially German ones like Daimler and BMW, tend to be conservative, and Agassi’s attempts to force them to adopt Better Place’s model caused them to recoil. “Shai correctly wanted to create a situation where the automakers would move quickly to electric,” says Amit Yudan, Better Place’s Austria-based business development manager. “The carmakers are used to a totally different ecosystem. Somebody from another industry trying to treat them as an equal partner is not in their DNA.” 

While this may be an easily digestible pill for tech types, the fact is that there is extremely limited congruity between tech and autos. Chafkin inadvertently paints a vivid picture of what happens when Agassi, who worked for Apple and came very close to being CEO of SAP tries to force tech paradigms into the world of autos, which Chafkin eloquently describes as missing “cultural and human connections.”

Agassi’s central thesis–that people wanted to buy car service the way they buy phone service–was flawed. “Nobody loves their wireless carrier,” Amit says. “They love their iPhone.”

Throughout the rest of the article, we see other mis-steps that would only serve to doom Better Place even further: profligate spending on vanity projects, elements that should have been outsourced, wanton contributions to further degrade an already poor culture.

Ultimately, we come back to the crux of the story, which is the failure of a start-up that could have and should have been a success.  Chafkin’s article leaves one with the feeling that the traits that helped Agassi – a total outsider to the automotive world – launch his ambitious, and heavily backed start-up, ultimately did him in.

Chafkin relates a story that neatly shows how Agassi’s lethal mix of hubris and ignorance served to kill his vision.

His deal with Renault would require Better Place to pay close to $32,000 for every car and battery that was delivered. Even if Renault had offered its car at a substantial discount, it’s hard to discern how Agassi arrived at that $20,000 figure–and even harder to understand why it was taken seriously. The car would ultimately retail for $37,000 in Denmark, not including the cost of the battery; in Israel the after-tax price would be roughly $35,000, plus $12,000 for the first four years of access to Better Place’s charging and swap-station infrastructure.

Agassi privately conceded to Better Place executives that the Renault deal was a bad one, but he was attempting to play a game of poker with the entire auto industry. “What Shai had in mind was that once we get a second car company, we could renegotiate with Renault,” says someone who was privy to pricing discussions. Better Place’s second car deal, the thinking went, would force Ghosn to come back to the table begging for new terms. “Because Shai’s an optimist, he was willing to sign anything Renault put in front of him. He didn’t think the price was an issue; it was an interim number.”

Although Chafkin ends his story with a mention of the success of the Tesla Model S and its swappable-battery capability. One can’t help but wonder how similar both Agassi and Elon Musk are: both rely on their boundless self-confidence and the adoring cadres of media, venture capitalists and tech enthusiasts to build their profile and lend legitimacy to their seemingly impossible aspirations. Both are able to tap into the relatively recent desire on the part of many to participate in disruptive social change, generally related to helping the environment upending the very nature of personal transportation.

The ironic tragedy is that while Agassi intended his cars to be a mass market replacement for gasoline vehicles, Tesla’s products are, for now, a luxury good, affordable only to wealthy individuals who live in the kind of climate ideal for EVs – the gilded communities of the Bay Area or Los Angeles, which are rife with extraordinarily affluent people who imagine that an electric car is perfectly acceptable for the rest of the country, regardless of weather conditions, charging time or driving distances.

Agassi’s solution could have mitigated those factors, but ended up a failure, while Tesla appears to be succeeding. Musk may very well be able to avoid this fate, but he is sure to face just as many challenges. The story of Better Place provides a road map on how not to go about this.

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Editorial: Canada Can Keep Kissing Auto Investment Goodbye http://www.thetruthaboutcars.com/2014/04/editorial-canada-can-keep-kissing-auto-investment-goodbye/ http://www.thetruthaboutcars.com/2014/04/editorial-canada-can-keep-kissing-auto-investment-goodbye/#comments Thu, 10 Apr 2014 11:00:59 +0000 http://www.thetruthaboutcars.com/?p=791649 800px-Oakville_Assembly-450x298

Globally, auto makers spent $17.6 billion on expanding manufacturing facilities – and none of that was spent in Canada.

Citing a study by the University of Windsor, The Globe and Mail reports that the last time any new investment was received by Canada’s industry was in 2012, when $180 million was spent on a single project. On the other hand, Mexico, which is enjoying a booming automotive sector, received $6.3 billion.

What was once the 4th largest vehicle assembly site is now the 10th largest, and output fell in 2013 by 4 percent. On the one hand, Canada is not alone. The report states that Germany has received no new investment over the past few years, and only nominal investments in Japan.

But all three countries face a similar problem. Nearby sites are cheaper to build cars in, at the expense of “domestic” locations. Former Easten Bloc countries like Poland, Hungary, the Czech Republic and Slovakia are popular sites for German OEMs, while Japanese auto makers have been ramping up production in Thailand. In both scenarios, the vehicles produced in those countries are considered to be just as high quality as their domestic counterparts, but at much lower costs.

Canada’s situation is particularly troubling. High costs for everything from labor to energy, combined with a reluctance on the part of the government (and general public) to match the generous subsidies offered by American and Mexican governments, has led to a major contraction of the auto manufacturing sector. Until recently, a high Canadian dollar was also weighing negatively on the sector, but a recent 10 percent haircut may help things along.

Canada will inevitably have to make the same choice that Australia faced just months ago: continue to offer subsidies to the auto industry to entice them to keep building cars in Canada, or watch it disappear. Proponents of subsidies argue that they are a pragmatic, reality-based choice given the current environment, and that the auto industry provides good, middle-class jobs in an economy that is in dire need of them.

Those arguing against will posit that the government should not be in the business of propping up uncompetitive businesses. The end of the auto industry will allow Canada to transition to a different kind of economy, and workers can simply go where the jobs are (namely resource and petroleum extraction in Alberta and other areas).

There are problems with both arguments. With a much smaller population than the United States, and a much higher standard of living than Mexico, continuing to compete in the subsidy game will simply be a race to the bottom for Canada. On the other hand, the notion that good jobs will materialize in place of auto manufacturing jobs lies somewhere on the spectrum between ideological fantasy and efficient-markets dogma. The expectation that laborers can pick up and go where the jobs are, in a quasi-nomadic fashion, ignores the many unquantifiable but tangible human and cultural factors that exist in the real world.

With that in mind, there’s one way to keep the workforce competitive and the economy strong, while avoiding the perpetual subsidization of the auto industry. Let the plants live or die on their own. Use the subsidy money to retrain former auto industry workers, where its picking up a new trade or more abstract programs like entrepreneurship training, business loans or anything else that can encourage productive activity in the economy.

It’s not like every plant will suddenly shut its doors either. Honda and Toyota will keep cranking out Civics and Corollas at their plants, which are the kinds of cars that Canadians have traditionally purchased (and given the way that current trends are going, are likely to keep buying). GM’s Oshawa plant, which builds the Impala, might not make it. And the Windsor plant, which builds the very popular Chrysler minivan, looks to be sticking around for at least a few years. If FCA wants to move production to Mexico or Italy or anywhere else in the global arena of automobile production, so be it. The money is better invested in the people of Canada. And with any luck, they’ll be able to vote with their newly fattened wallets when it comes time to purchase their next car.

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Editorial: Get Ready For Massive Recalls Driven By Modular Platforms http://www.thetruthaboutcars.com/2014/04/editorial-get-ready-for-massive-recalls-driven-by-modular-platforms/ http://www.thetruthaboutcars.com/2014/04/editorial-get-ready-for-massive-recalls-driven-by-modular-platforms/#comments Wed, 09 Apr 2014 17:01:44 +0000 http://www.thetruthaboutcars.com/?p=791697 mqb6

Today’s recall announcement by Toyota estimated to span at least 6.4 million vehicles, serves as a nice distraction from the ongoing recall occurring at cross-town rival General Motors. The Best & Brightest are free to squabble about which faceless corporate entity with zero regard for their individual well-being is the superior one. The rest of us have bigger fish to fry.

At 6.4 million vehicles, this Toyota recall is massive. It won’t be the last one. In fact, I think that ten years from now, this will be a low number.

The big trend in the auto industry today is modular platforms, which allow an enormous range of vehicles to share components. Volkswagen’s MQB architecture is an oft-cited example of this, largely because it takes a holistic approach to modularity. Much like Lego bricks, different “modules” can be assembled to create different vehicles. MQB is capable of spawning everything from a B-segment Volkswagen Polo to a D-segment Volkswagen Passat to an Audi TT sports car to a Volkswagen Touran minivan. Only a small number of “hard points” like the dimension from the center line of the front wheel to the pedal box, or the engine mounts, are fixed.

Within these modules are a high level of common parts, designed to be used across the entire range of MQB vehicles. This can include everything from whole powertrains to braking systems to smaller components that could be shared across a range of small to mid-size vehicles – which is, in theory, a truly vast quantity. Other commentators have expressed worries that MQB will lead to components being mismatched to their application. An A/C system engineered for a Passat might be overkill on a Polo (or vice versa) from a utility or financial standpoint.

From a purchasing standpoint, MQB will allow Volkswagen to buy lots and lots of widgets, receiving a significant discount on the cost per widget. This will equal significant savings for VW (though just how much they’ll save seems to depend on who you ask) while leading to shorter assembly times and more standardized production of vehicles. In the event that demand for a given model changes, a factory could scale back production of a slower selling model to help meet demand for the more popular one. This gives Volkswagen unprecedented flexibility in the way that cars can be designed, engineered and manufactured.

It also leaves Volkswagen in a very vulnerable position. What happens if they get a bad batch of widgets from a supplier, or the widget in question was poorly engineered? What if a manufacturing process was poorly designed, and the widgets aren’t installed properly? With so many vehicles assembled with the same faulty part or process, the impact could be enormous: millions of vehicles requiring repair, a black eye for Volkswagen and, heaven forbid, human lives negatively impacted.

This kind of exposure to potential quality defects and mass recalls was dubbed a “Cascading Failure” in a prior article, but many readers with engineering backgrounds objected. Instead, we can call it a “platform level failure”, which is the key difference between the scenario outlined above, and the Toyota recall, which affects everything from the Yaris subcompact to the Land Cruiser SUV.

But in a future where every car maker will have to adopt some kind of modular architecture, the likelihood of these events occurring is almost certain. And those who have invested most in common vehicle architectures are at the greatest risk.

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