With NHTSA opening a formal defect investigation into the Chevy Volt, GM is moving to defend its rolling lightning rod (no pun intended) and allay consumer fears about its safety. Yesterday I briefly appeared on Fox Business’s Your World With Neil Cavuto show to talk about what the intro to my segment referred to as “the hybrid from hell” and the “killer in your garage.” I tried to explain that the danger to consumers was basically nil, and that the real concern is for rescue, towing and salvage workers. And I would have explained why NHTSA’s tests still leave some serious questions open, but my “fair and balanced” approach meant that my segment ended up being extremely short. So let’s take the opportunity now to look past the hysteria and pinpoint the real issues with NHTSA’s investigation into the Volt.
Knowing that some of the top PR professionals in the business are regular readers of TTAC (they could be anyone…), I can imagine a number of them shaking their heads in disapproval at the headline of this post. “It’s happened,” they’re probably muttering to themselves, “TTAC has finally lost the plot.” But instead of dismissing out of hand the seemingly preposterous premise of this post, I ask the assembled anonymous masses of PR pros to bear with me for a moment. As laughable as it might seem to postulate that the industry’s spin doctors can learn something from the most infamously “off the reservation” auto exec ever, the urge to write off this post is part of the very problem I hope to tackle. Allow me to explain…
No, I’m not talking about the cars and SUVs that Mercedes assembles in Alabama. Yesterday, Jack Baruth told us about the relationship between the American Steinway and German Daimler companies and the cars that Steinway started assembling under license from Mercedes in 1905. When I read Jack’s article I remembered that I had something in my collection of press kits, sales brochures, images and and assorted swag (with apologies to Mr. Zimmerman) that I’ve been accumulating for the past decade or so of working the press previews for the Detroit, Chicago and Toronto auto shows. In 2006 Mercedes Benz distributed a reproduction of a reproduction. It’s actually a very cool little piece of automobilia and a nice facsimile of a historical artifact, in a couple of ways.
It’s a small booklet, less than 40 pages, called The American Mercedes. It was originally distributed in 1906 by the Daimler Mfg. Company, on Steinway Ave. in Long Island City, and promotes the 1906 45 horsepower “American Mercedes”. It was reproduced in the early 1960s, and the copy M-B gave out in 2006 had a 1961 afterword and an insert from 1964. The whole package is chock full of historically interesting aspects.
Having been asked by a certain newspaper to review the new book “American Wheels, Chinese Roads: The Story of General Motors in China [more info on that review coming soon], I’ve been spending my quiet moments over the last week or so looking into GM’s Chinese operations. The book’s author, Michael Dunne, documents GM’s rise in the Middle Kingdom from the perspective of a well-informed outsider, revealing just how delicate one of GM’s best-performing global maneuvers really was. But after following the rise of GM in China, Dunne notes the December 2009 announcement that GM was selling a 1% stake in its Shanghai-GM (SGM) joint venture to its Chinese partner SAIC (for the paltry sum of $85m no less), arguing that GM had made a dangerous leap of necessity. This sale, implies Dunne, could well have been the tipping point that leads to GM being surpassed by its erstwhile junior (in size, technology and global reach) partner, SAIC. And, in the words of “one GM executive who used to work in China,” GM would need
good luck getting that back.
But, back in June, GM CEO Dan Akerson told GM’s shareholder meeting that he wants to do just that, saying
We have an option to buy that 1 percent. It’s our intention to exercise that.
With Akerson’s announcement, the mystery of GM’s “golden share” sale deepened. At first the question was simply “why would GM sell its 1%?” but now there’s another mystery: why would GM want it back? After some digging, it seems that we are now able to resolve the first mystery, and report why GM sold its one percent. But the whole deal is still surrounded by several layers of mystery which conceal whether GM will in fact be able to regain its 50-50 partnership in SGM, why it would want to and whether its gambit was ultimately worthwhile. And given how important China has been (and continues to be) to GM’s global business, this is definitely an issue that GM- and industry-watchers will want to better understand.
When should a redesigned car get a new name? Whenever the old one wasn’t a success? Or virtually never? Can car companies count on the excellence of a new car to reverse whatever damage was done to the public perception of the model name in the past?
I am sitting in a parking garage in a throng of torpid auto-journalists, nearly all of whom are wearing the same glazed expression of terminal information overload. On-screen, molecules of fuel and air are doing a complicated little computer-animated dance, as narrated by Susumi Niinai, program manager at Mazda’s powertrain development division. His English, while Japanese-accented, is better than, y’know, mine, but the concepts he’s explaining approach the limit of comprehensibility to the lay-person. Mind you, it’s a pretty nice parking garage.
Some of you, like me, may have been hearing all the rumblings about Mazda’s new SKYACTIV technologies and been wondering whether it’s going to turn out to be a series of technological breakthroughs or, alternatively, a load of complete cobblers thought up by some Zoom-Zoom marketing guru.
Good news everyone! It’s the former. Bad news everyone! I have to try to explain it to you. And I borderline don’t understand it myself. Here goes…
A final rule for 2017-2025 CAFE standards won’t be published until September, but a pre-publication notice by the EPA [PDF here] reveals some of the key details we’ve been looking for. The broad strokes, which we are already well aware of are shaping up as follows:
NHTSA currently intends to propose standards that would be projected to require, on an average industry fleet wide basis, 40.9 mpg in model year 2021, and 49.6 mpg in model year 2025. For passenger cars, the annual increase in stringency between model years 2017 to 2021 is expected to average 4.1 percent, and to average 4.3 percent between model years 2017 and 2025. Like EPA, in recognition of the utility requirements of full-size pick-up trucks and the unique challenges to improving fuel economy compared to other light-duty trucks and passenger cars, NHTSA intends to propose a lower annual rate of improvement for light-duty trucks in the early years of the program. For light-duty trucks, the proposed overall annual rate of fuel economy improvement in model years 2017 through 2021 would be 2.9 percent per year. NHTSA expects to change the slopes of the fuel economy footprint curves for light-duty trucks from those in the 2012-2016 rule, which would effectively make the annual rate of improvement for smaller light-duty trucks in model years 2017 through 2021 higher than 2.9 percent, and the annual rate of improvement for larger light-duty trucks over the same time period lower than 2.9 percent. For model years 2022 through 2025, NHTSA expects to propose conditional standards with an overall annual rate of fuel economy improvement for light-duty trucks of 4.7 percent per year
We had heard that trucks would improve their efficiency at a rate of 3.5% rather than 2.9% for the 2017-2021, and a 2022-2025 growth rate of 5% rather than 4.7%. But then, cars were supposed to improve by 5% in the 2017-2025 period, so both truck and car standards seem likely to end up lower than what the president’s report seemed to promise. But that’s not the only bad news for anyone hoping for tough fuel efficiency standards (or, good news for truck-dependent automakers)… with the release of this notice, we have an initial sense of the loopholes that will be included, and they appear to be of the hefty variety.
Electric vehicles present all kinds of challenges to the traditional ways of understanding cars. From design to differentiation, from range to refueling, EVs simply act different than the internal combustion-powered cars we’ve been refining for centuries now. And yet, through consumer incentives and subsidized charging stations, governments seem to be barreling headlong towards the goal of simply replacing our gas cars with electric ones, as if the two were fundamentally interchangeable. Sadly this is not the case, and a study by Project Better Place and PJM Interconnection [PDF] illustrates in stark terms just how costly an unplanned, uncoordinated rush to electric cars can be.
The controversy over red light cameras, once relegated to websites like TTAC, thenewspaper.com, motorists.org and highwayrobbery.net, is hitting the mainstream media thanks to a new study by the IIHS [PDF here]. The study used the following methodology:
Telephone surveys were conducted with 3,111 drivers in 14 large cities (population greater than 200,000) with long-standing red light camera programs and 300 drivers in Houston, using random samples of landline and cellphone numbers. For analyses combining responses from the 14 cities, cases were weighted to reflect each city’s share of the total population for the 14 cities.
And what did they find?
Among drivers in the 14 cities with red light camera programs, two-thirds favor the use of cameras for red light enforcement, and 42 percent strongly favor it. The chief reasons for opposing cameras were the perceptions that cameras make mistakes and that the motivation for installing them is revenue, not safety. Forty-one percent of drivers favor using cameras to enforce right-turn-on-red violations. Nearly 9 in 10 drivers were aware of the camera enforcement programs in their cities, and 59 percent of these drivers believe the cameras have made intersections safer. Almost half know someone who received a red light camera citation and 17 percent had received at least one ticket themselves. When compared with drivers in the 14 cities with camera programs, the percentage of drivers in Houston who strongly favored enforcement was about the same (45 percent), but strong opposition was higher in Houston than in the other cities (28 percent versus 18 percent).
Sounds like those red light cameras are pretty great after all, doesn’t it? That’s certainly the IIHS’s takeaway…
General Motors CEO Dan Akerson set off something of a firestorm a few weeks ago, when he said, in response to a question about forthcoming CAFE increases:
You know what I’d rather have them do — this will make my Republican friends puke — as gas is going to go down here now, we ought to just slap a 50-cent or a dollar tax on a gallon of gas.
Predictably, populists and economic alarmists of all stripes took great umbrage at Akerson’s candor, questioning his leadership of GM as well as his perspective on the shaky US economy. But Akerson is not alone in his support of some form of gas-tax increase. Bob Lutz and Tom Friedman (an odd couple right there, if ever there was one) agree with him. Edmunds CEO Jeremy Anwyl defended Akerson and even suggested a $2/gallon tax earlier this year. Bill Ford and AutoNation’s Mike Jackson are of the same mind as now-retired Republican Senator George Voinovich on the issue. And yet, inside the Beltway, the subject tends to draw a chuckle and a roll of the eyes. Everyone wants it, but nobody wants it.