Cassandra Watch: Daniel Howes Edition

cassandra watch daniel howes edition

Like the gas price spike that helped launch the current industry death spiral, nobody saw a possible D3 bankruptcy coming. Well, outside of this little corner of the internet, anyway. But with the mainstream media catching wind of what we’ve been crying in the desert for years now, a number of well-known industry analysts are coming around to the notion that America may not have three big automakers anymore. Jalopnik’s Ray Wert was ahead of the (adjusted) curve, bellying up to the TTAC line (sorta) yesterday. Today, none other than Danny Howes of the Detroit News is playing Cassandra-come-lately as merger and bankruptcy rumors take industry-watchers by storm. To be fair, Howes isn’t blind to Detroit’s sins, and his columns have been taking an increasingly alarmist tone for some time now. But until this week he’s faced the strings and arrows of outrageous fortune with brave face and stiff upper lip. No longer.

In his latest column “One Of The Big Three May Not Survive,” Howes lays down the pom-poms and faces facts: Detroit is screwed, and none of the solutions will be convenient or easy. Howes says a potential GM-Chrysler would be a “neutron bomb,” eliminating thousands of jobs to keep hard assets and cash intact. He notes that “GM needs more brands, more plants and more dealers like it needs another credit crunch.” Finally he concludes “GM’s directors aren’t keen to embrace a Chrysler deal with Cerberus because they realize the remedy for what ails GM won’t come from swallowing a competitor. It’ll come from buying enough time to survive the imminent shakeout because — and I wish I could say otherwise — one of Detroit’s Big Three may not.” Don’t worry, Danny… you’ve tried to say otherwise for long enough.

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  • Joeaverage Joeaverage on Oct 15, 2008

    I still think GM is doing some of this on purpose to stop the perpetual bleeding of self inflicted wounds i.e. retiree benefits, franchise laws, UAW rules, etc. They go broke, scare the gov't into changing legislation for them like eliminating franchise laws and union shop rules and eventually in the long term GM crawls back to a reasonable marketshare as a leaner, meaner corporate hunting dog. They can't continue to do business the same way as they have for 75-100 years and they know it. Going broke is the only way they can change the situation they are in. They can't move out of Michigan b/c the UAW agreements prob follow them everywhere. They can't get out from under benefit agreements. They can leave the states with union shop rules but the UAW would likely badly hobble GM at the same time in other GM plants.

  • Phil Ressler Phil Ressler on Oct 16, 2008
    This disaster could have been avoided with clear thinking, absolute honesty, and ruthless leadership. All of which is long gone in Detroit. Poor management and some regrettable products notwithstanding, this disaster could have been avoided if American auto buyers simply bought more of the good D3 cars instead of foreign and transplant alternatives that were either not meaningfully different, sometimes inferior, or at best only marginally better. American consumers who refused to consider and buy from the selection of competitive D3 vehicles over the last decade will soon see the true cost of their decisions. Coping with and paying for the consequences of a broken domestic auto industry will show you how dearly expensive your import purchase was. Unemployment, and all the social costs that go with it, are expensive beyond the dollars. Was your Camry, for example, really worth it, over a Malibu, Taurus or Fusion? Even in a diminished market, Americans can revive Detroit without a government bailout. Their aggregate purchasing power is the dormant tool. Unfortunately, for every CTS-V, there’s a 9-7X. For every Malibu, there’s a G5. And for every G8, there’s a Torrent. While some may disagree with your choices representing undesirable D3 cars, fine. Let's put that aside for the moment. Let the uncompetitive languish. Forget the low-volume V -- more CTS over competing entry luxury models. More Malibu over Accord and inferior Camry. More G8 over Audi and BMW, etc. Americans like to evade personal responsibility for the society and culture that's grown around them. From dumbed-down politics to drug-related crime to coarsening of public behavior -- you name it -- fingerpointing rules our response. Rick Wagoner did it. It's Bill Ford's fault. A dealer once screwed me on a warranty repair. I want to fit in. It's not cool to drive a Ford or Chevy. OK, your prerogative. Here's the bill. It's stunning how blithely so many people fail to see or acknowledge their own contribution to the unfolding calamity. Management of the D3 has been an infuriating problem for far too long, but the market's penchant for holding outdated grudges and unwillingness to embrace the products of management doing something right is an equal contributor to the D3 wreckage. The consumer cannot escape the reality of sharing credit or blame, depending on your point of view regarding the state of the D3. Phil

  • Matt Posky A lot of dune buggies aren't street legal and plenty that are aren't really fit for any kind of sustained highway driving.Unless you live in a state where it's pretty much wide open for vehicle mods and the cops don't care how wild your ride looks, you're probably towing it to its play space. While the Manx should be street legal and capable of making it to the dunes without outside help -- arguably part of its appeal vs other options -- it's hard to assume a majority of owners won't still opt to drag it behind their pickup or SUV.
  • Pmirp1 That is one more color than they have added to Grand Cherokee or Grand Cherokee L in three years. White, Grey, Silver, Black and a dark boring red. No Blues. No Forest Greens. No Beige. It is as though Jeep forgets they own the green SUV market and yet they refuse to give us any rich colors.
  • Golden2husky Customers should simply not buy this with such stupid markups. But since this is a "limited edition" model there will be those stupid enough to pay it. I walked away from a Supra for my wife because the dealer wanted a $20K markup on a $54K car...this Before the pandemic. Screw that. I worked way too hard for my money to throw it away. If I'm going to give my money away there are plenty of causes I support and dealers ain't one of them...
  • Arthur Dailey In the current market many are willing to pay 'extra' to get a vehicle that may be 'in stock'/on the lot. An acquaintance recently had his nearly new vehicle stolen. His choices were rather limited a) Put a deposit down on a new vehicle and wait 4 to 6 months for it to be delivered. And his insurance company was only willing to pay for a rental for 1 month and at far less than current rental costs. b) Purchase a used vehicle, which currently are selling for inflated prices, meaning that for the same vehicle as the stolen one he would need to pay slightly more than what he paid for his 'new' one. c) Take whatever was available in-stock. And pay MSRP, plus freight, etc and whatever dealer add-ons were required/demanded.
  • SCE to AUX I like it, but I don't know how people actually use dune buggies. Do you tow them to the dunes, then drive around? Or do you live close enough that the law winks as you scoot 10 miles on public roads to the beach?As for fast charging - I doubt that's necessary. I can't imagine bouncing around for hours on end, and then wanting a refill to keep doing that for a few more hours in the same day. Do people really run these all day?A Level 2 charger could probably refill the 40 kWh version in 6 hours if it was 80% empty.