When the historians chronicle Detroit’s decline and fall, Daimler’s rape and pillage of the storied American car brand will merit an entire tome. In short form, the Germans came, they saw, they laughed, they lunched, they left. And when they left, they maintained a 19.9 percent share in the hollowed-out American automaker. Wishful thinking? Tax law? A codicil from Cerberus to allow Chrysler’s new masters to sue the shit out of the Germans if things went badly? In any case, thanks to The Presidential Task Force on Automobiles determination to reconstitute Chrysler as a worker’s co-op, by Friday, Daimler gets to see Chrysler implode from afar. [NB: So much for the "The Big 2.8".] Bloomberg reports that Daimler will ”cede” its remaining its stake in “former U.S. division” (ouch) to Cerberus Capital Management LP. More to the point, the “transaction” will result in a $700 million write down in the second quarter. Oh, and Daimler will “forgive” $1.3 to $1.7 billion worth of “loans” to Chrysler. And “contribute” $600 million to the US automaker’s pension plans over the next three years. Meanwhile, Daimler’s own haus is on fire . . .
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According to Automotive News [sub], the United Auto Workers (UAW) agreement with Chrysler/Fiat would deliver unto the union a 55 percent share of the reborn Italian – American automaker. As in the proposed (but doomed) GM bondholder offer, ChryCo union workers will forego a multi-billion dollar payment into their Voluntary Employment Beneficiary Association (VEBA) health care fund in exchange for the equity stake. In Chrysler’s case, $6 billion buys them controlling interest in Chrysler. That’s all kind of nuts on all kinds of levels. And as we’re in tail wagging the dog territory . . .
Political posturing, trial balloons, PR positioning—savvy elected officials know that professional survival depends more on voters’ perceptions than actual accomplishments. And so, when Norway’s Finance Minister called for an end to the sale of purely petrol powered vehicles by 2015, it was a major miscalculation. Info consumers are hard of hearing; they perceived Finance Minister Kristin Halvorsen’s proposition as a general ban on all gas-powered vehicles (including hybrids) in six years. Halvorsen was forced into damage-control mode, “This is much more realistic than people think when they first hear about this proposal,” she told Reuters. The fact that no politician in their right mind would suggest such a thing clearly occurred to the plucky Norwegian: “Halvorsen knew of no other finance minister in the world who was even arguing for such a goal. ‘I haven’t heard about any ministers. I’m not surprised. We are often a party that puts forward new proposals first.’” That said, Halvorsen has been on the front lines of extreme ideology before; she was forced to rescind her call for a ban on Israeli-made products.
My 1995 Lexus LS 400 needed a replacement computer to fix a known drivability problem related to the car’s throttle position sensor (TPS). Ever since I got the computer back, my car dies at low idle. I’ve reproduced it with the AC on, turning the AC off and then coming to a stop: it almost always stalls from its low idle.
When I originally had the computer checked out at a Lexus dealership, they said I might need to adjust the TPS after installing the new computer. I imagine that is what is going on, especially since the original codes from the (now replaced) computer said it was the TPS and I replaced it with a new one. Do you know if TPS adjustment is an easy fix that my mechanic can do?
“Our ‘CC’ corporate credit rating on GM continues to reflect our opinion that there is a high likelihood that the company will undergo a distressed debt exchange (which we would consider tantamount to a default under our criteria) or file for bankruptcy protection toward the end of May or shortly thereafter.
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But as one door closes, another opens. With Pontiac dead, Automotive News [sub] reports that GM will use its NUMMI capacity for some other Corolla-based GM product. Because, as one Pontiac spokesman puts it, “there’s really nothing wrong with the Vibe. Its only problem right now is that it is a Pontiac.”
Late last Friday, GM revealed in a regulatory filing with the Securities and Exchange Commission that its employee stock fund manager, State Street Bank and Trust Co., has unloaded all company shares. According to the Associated Press (AP), “The plan’s financial manager said it began selling off shares of the Detroit automaker in late March ‘due to the economic climate and the circumstances surrounding GM’s business.’” This may help to explain the dead cat bounce GM’s stock experienced today.
At this morning’s press conference, GM CEO Fritz Henderson couched his decision to “choose” viability over jobs in terms of lowering GM’s break-even point. Like job cuts, UAW concessions and nearly every other recent viability-oriented reform goal, GM’s break-even point predictions have been consistently more optimistic than leading reality-based indicators. With every new viability scheme, GM’s assumptions about the demand for US-market new cars in 2009 have been revised downward. According to the NY Times, even though this is viability plan V3, GM may still have some reality embracing to do.
Or so says Automotive News [sub] Executive Editor, Edward Lapham, in a brief aside. According to Lapham, Chrysler is ramping up a major ad campaign (a fact that remains unconfirmed by Chrysler) that steals from the $5 billion supplier bailout fund. “Through its ad agencies,” writes Lapham, “Chrysler is lining up major media that are willing to accept a price cut of 2 percent in exchange for assured payment under the federally funded critical-supplier payment plan.” Because Chrysler wanted to see if its post-bailout supplier relations could possibly be worse. Although to be fair, those two percent savings do add up . . . to about 30 pieces of silver.
Dimmick, Chuck P.
born December 29, 1958 in Riverside, CA passed away suddenly on April 18, 2009 while attending a NASCAR race to watch his favorite driver, Jeff Gordon. Chuck was the loving husband of Kristen and devoted father of Dillon. Chuck was the Director of Marketing for the Lund Cadillac Group. We are sure he would still want all to know that 0.9% financing is still available on all New 2008 Hummer H2′s. A mass celebrating Chuck’s life will be held at 11:00 AM on Friday, April 24th at St. Patrick’s Church – 10815 N. 84th St. Scottsdale, AZ. Arrangements handled by Hansen Desert Hill Mortuary 480-991-5800. In Lieu of flowers, contributions may be made to the Dillon Dimmick Donation Fund at any Bank of America.
Pop quiz time: how many viability schemes has GM touted since it began asking for bailout bucks? Including today’s announcements (actual plan not yet released) General Motors has submitted no fewer than three new business models since it began receiving Treasury funds in mid-December. And that doesn’t even include the first two “requests” which were rejected by Congress before GM cut out the middlemen and started dealing directly with the guys who print the money. The progression of this parade of plans illustrates a single major theme: the slow, reluctant acceptance of some approximation of reality. Which includes confronting the fact that GM’s bloated payroll trades off with its viability. The Detroit News reports that GM now understands that it pays 21,000 more employees than it can support, and that these positions will be terminated. That’s 7,000 more job cuts than the last (February) plan called for. The December plan (now lost to the GM memory hole, but hosted at TTAC here (PDF)) didn’t call for job cuts at all because the bailout was all about saving jobs back in those days. The cuts amount to a 34 percent decrease in hourly employment, with plans to stabilize employment levels at 38,000 by 2011. GM’s hourly labor costs will drop from $7.6 billion in 2008 to $5 billion in 2010, as GM seeks to “lower its break-even point” according to CEO Fritz Henderson.
This site is not generally known as a fan of GM’s cars. And yet TTAC has lavished much love upon Pontiac’s thunder from down under: the G8 GT. The general line: if the 361-horsepower V8 version is magic, the 415-horsepower GXP should be an automotive miracle. Especially as the GXP offers the option of a manual gearbox. So, did Pontiac save its best car ever for last?
The Pontiac G8 GXP includes model-specific 19-inch wheels and a more aggressive front fascia. If you were expecting something more distinctive, you’re SOL. Just like the G8 GT most people will mistake it for, the GXP is a tasteful (aside from the hood scoops) homage to BMW’s E46 M3—that lacks the visual punch of Chrysler’s large SRT sedans. For all the talk that tastefully reserved pre-Bangle BMWs were da bomb, the Pontiac G8 proves that subtle styling doesn’t attract buyers to a new model.
The G8 GXP’s roomy (this is a LARGE sedan) cabin is virtually identical to that of other G8s. It’s dark and functional (i.e., dreadfully austere). Another homage to the way BMWs used to be? Like those traditional Bimmer interiors, the G8’s cabin says “only serious drivers need apply.” Well, there’s one exception: the seats. They’re comfortable, but as in other G8s the side bolsters could be more aggressive.
The 361-horsepower G8 GT doesn’t feel as quick as the specs suggest. Blame an overly muffled exhaust and an insufficiently responsive automatic transmission. The GXP provides solutions: another 54 horsepower, a louder (thankfully only when you push it) exhaust system and the option of a six-speed manual transmission. Of the three, the extra horses are probably least necessary, and probably aren’t worth the toll they take on fuel economy.
[Quick aside: the G8 GXP's EPA ratings fall from 15/24 to 13/20, incurring a $1,700 gas guzzler tax. The problem isn’t so much the extra displacement as the elimination of cylinder deactivation. Not a good call with the automatic, but probably unavoidable with the manual. To further maximize the EPA ratings (how bad would they have been otherwise?), the manual shifter skips from first to fourth in relaxed driving. Diehard pistonheads may complain; in practice, it's not an issue. If you’re not pushing the car, the engine has more than enough low-end torque to motivate the G9 GXP even in fourth gear. If you are pushing the car, the shifter won’t skip second and third.]
The Pontiac G8 GXP’s medium-throw shifter and low-effort clutch don’t annoy in traffic or frustrate in hard driving. You won’t mistake them for those in a Miata or S2000, but they’re far better than those in the Pontiac GTO and first-gen CTS-V. Again, pair a manual cog-swapper with the G8 GXP’s appropriately throaty 415-horsepower 6.2-liter V8 and you’ve got a large sedan that not only is quick, but feels quick. Need to scrub some speed? Big GXP-only Brembos make the task easy.
Get on the gas in a turn, and oversteer happens. No surprise, given the pounds-feet in play. And yet the G8 GXP won’t be coming soon to a ditch near you. Especially with the direct linkage provided by the manual transmission, the G8 GXP oversteers in such a predictable linear fashion that right-foot steering is the default option.
Push too hard despite clear feedback through the seat of your pants? A touch of countersteer restores your intended line. (The standard stability control doesn’t kill the fun until it stops being fun.) Though the steering isn’t quite as communicative as the chassis, the G8 GXP’s handling could hardly be more intuitive. Step up the tempo, and the G8 shrinks around you. It feels much more tossable than a 196-inch-long, two-ton sedan has any right to. Even some of the world’s thickest A-pillars barely dent driver confidence. Simply put: you won’t find a large sedan that’s more fun to drive.
The GXP’s suspension tuning is just a scosh firmer than the GT’s. Those seeking a hardcore feel might be disappointed. Those seeking a livable ride won’t.
And so, while the G8 GXP could make a stronger styling statement, it’s the best all-around driver’s car the brand has ever offered. Still, there are two big problems. First, the G8 GT is nearly as much fun to drive, while getting substantially better gas mileage and costing over $6K less. Clutch-avoiders should buy the GT, then spend a fraction of the savings on a sweet-sounding aftermarket exhaust.
But if you want a large sedan with a manual transmission, then the G8 GXP is not only the best game in town, it’s the only game in town. Which brings us to the second big problem: this game is leaving town. With the Pontiac brand headed for the dustbin, all G8s will soon be gone. Get one while you can.
Whiskey Tango Foxtrot indeed. How could Toyota Prius, The Next Generation, not offer direct access to Apple’s technophile (technophobe?) gizmo? No USB paradise by the dashboard lights? True story, brought to you by PriusChat (motto: “Press our buttons”). “The USB integration won’t be available out of the factory until September, and it will only come with the Navigation option package that is available in the Prius III, IV, and V. Customers who buy their Navigation-equipped Prius before September will be able to have the USB kit installed at the dealer, but at their own expense. There are no specifics right now, but it looks like in September when the USB connectivity is added to the Navigation package, the price of the Navigation package will be going up. It hasn’t been established yet whether that price increase would be the same as the price a dealer will charge to install it, or if the dealer-installed USB will be more expensive.” It doesn’t take much Insight, or a Honda Odyssey without iPhone integration, to realize that this is a major marketing misstep by the ToMoCo. Did you know that Microsoft’s Zune can operate through your vehicle’s FM radio? Just sayin’.
Time’s up! GM has announced that 2010 will be Pontiac’s final year. No surprise to anyone who’s been reading the writing on the wall. But nevertheless a sign that those in charge of GM’s destiny are more interested in appearing to be doing something than in actually addressing the core weaknesses of the car manufacturer. Why is so much attention focused on GM’s brands? Because, like the CEO, they’re what outsiders can see and at least superficially understand. The real problems are both less visible and less easily comprehensible.
As some within GM have long recognized, a wide array of brands could be a major competitive advantage. When you have multiple brands to work with rather than just one or two, each brand can be tightly focused, and thus be more meaningful than a brand that must be all things to all people. GM didn’t prosper because it failed to provide each brand with distinctive, desirable cars. Instead, every brand attempted to be all things to all people. Why? Partly because distinctive products cost more to develop than badges alone, but also because each brand had its own dealers, and each dealer wanted one of everything.
Dealers’ desire was not irrational. Demand for different sorts of cars varies with gas prices, the economy, and fluctuating consumer tastes. Any dealer that wanted steady sales—a key goal for any business—wanted a diverse set of products to sell. This longstanding problem was finally addressed a few years ago, when Buick, Pontiac, and GMC were combined into a single channel. This should have freed up Buick and Pontiac to focus on specific groups of car buyers with finely tuned products.
Pontiac’s focus was to be enthusiasts—for real this time. Bob Lutz announced that every future Pontiac would be a rear-wheel-drive performance-oriented car. Three models, each with two or three body styles, would have been sufficient: the Solstice coupe and roadster, the large G8 sedan and (planned but canceled) wagon, and a smaller Alpha-based coupe, sedan, and (possibly) hatch. No other mainstream brand offers a compact rear-wheel drive sedan, or focuses so tightly on enthusiasts. An Alpha-based Pontiac could have been a big winner. Hopefully we’ll still see this car from Chevrolet. But it would have been better from a brand focused entirely on driver’s cars.
So, maybe GM had finally figured out how to realize Pontiac’s potential, only to have gas prices shoot up and then have the bottom fall out of the market. GM being GM, plans for performance-oriented cars were tabled not long after gas prices spiked. Unlike the strongest auto companies, GM has long had a habit of constantly second-guessing its plans and over-reacting to car market fluctuations. Of course, this time around GM had no choice: it’s out of cash. It might have finally muddled through to a solution, but too late.
And so Pontiac will die next year. Saturn, Hummer, and Saab will be gone even sooner. This doesn’t change one key fact: killing brands does not address GM’s historical inability to consistently create distinctive, desirable cars.
Limited resources have often been blamed for this inability. Supposedly GM split its product development and marketing funds too many ways. But if each product was viable, it should have been possible to gather the necessary funds for it, at least before the recent collapse. Funds were limited because of limited faith, both inside and outside GM, that proposed products would be profitable.
The root problem: senior executives at the top of the corporation continue to be involved in more product decisions than they can possibly make well. These senior executives cannot understand each product and market the way an empowered, dedicated product team could. And they lack the time to personally make all of the decisions that need to be made.
The visible consequences: a few great cars that received the undivided attention and logjam-breaking influence of senior executives, and a larger number of not-so-great ones that did not receive this attention and influence.
Two possible solutions: reduce product offerings to a number that senior management can personally attend to, or transfer decision-making authority for these products to multiple units lower in the organization. GM made feints at the latter strategy, most notably with the mid-nineties formation of cross-functional vehicle teams led by Vehicle Line Executives. But this decentralization was never complete, and with each crisis the organization backslid to its old ways.
Even with GM on the brink of bankruptcy, there’s still no sign that substantial changes are being made to the GM organization. They’ve replaced the CEO and they’re reducing the number of brands. This treats the symptoms rather than the disease. How this course of action generally turns out: the surgeon (wielding a cleaver in this case) cuts and cuts and cuts until the patient dies.