We've long argued that Cerberus Capital Management will do whatever it takes to stem Chrysler's cashflow cataclysm.  The Wall Street Journal reports that the Chrysler Group's new management team is giving their poorer-performing dealerships six months to improve sales or face closure. Chrysler has already banned 450 or so so-so dealers from their used car auctions in an attempt to force them to sell more new cars. The warning signals the next step in their campaign to cull underachievers from the automaker's bloated ranks. Like GM and Ford, Cerberus wants to "encourage" smaller dealerships to merge with larger ones. That said, Cerberus better walk softly with that big stick. Car dealers are protected by state franchise laws; dealer groups wield a mighty checkbook at the state level. 

Like most other states, Connecticut has been buying flex-fuel vehicles to comply with the Energy Policy Act of 1992 (EPAct), which requires that 75 percent of new vehicles purchased by the states be capable of running on alternative fuel. According to The Hartford Courant, 1700 of the state’s 4299 vehicles are now flex-fuel compatible. But there’s a snag. There are only two E85 pumps in the entire state. Little wonder that a study released earlier this week by Connecticut Governor M. Jodi Rell found that the state's flex-fuel vehicles use ethanol only three percent of the time. Given the cost-benefit ratios involved, I can’t help thinking ethanol is a solution looking for a problem.

The Big 2.8 should consider themselves lucky in their current UAW negotiations if the union just wants keep what they have and not give anything back. The Moscow Times [sub] reports that workers at the AvtoVAZ assembly plant in Togliattigrad, Russia are demanding a pay increase that equals three times their current salaries. Five thousand of the 110k workers at the plant are threatening to strike if they don't get a pay increase of 25K rubles (about $980) per worker. The Times suggests that a strike of that size could effectively shut down the plant which produces, among other things, GM joint venture vehicles. No word yet on whether the UAW plans a show of solidarity in support of their comrades.

Not that Camcordima or Miata drivers have noticed, but GM’s long-neglected Saturn brand has been busy rolling out a raft of new models. I came, I saw, I drove, I despaired. The Aura, Sky and Outlook are fine machines, but even better examples of “80%” cars: GM vehicles that are an interior, gearbox, suspension and/or trunk space away from greatness. So when I saw the all-new, Opel-sourced 2008 Saturn Vue, I thought I knew exactly what was coming my way. I don’t mind saying it: I was somewhat wrong. 

The court case pitting Ford against engine maker Navistar continues, as both sides wrangle over liability for $800m worth of warranty work performed on Navistar's 6.0-liter diesel. According to Dealer Magazine's resident legal expert, Navistar's looking to lay blame for the big ass bill at the doorstep of Ford dealers for performing unnecessary repairs, failing to follow proper repair procedures and, in some cases, not actually doing claimed repairs. Rich Sox says Navistar's subpoenaed 24 dealers (his clients) in Florida, Georgia, Ohio and Texas requesting thousands of pages of warranty documents. Sox' dealers aren't happy about the prospect of Ford and Navistar pawing over their warranty records– not because they have anything to hide, right? "Of course, we have to be careful how we object to these subpoenas. It would not go over very well with the judge to argue that the warranty records shouldn’t be produced because dealers may have done something wrong." Sox' strategy: resist the legal request on the grounds of confidentiality, inappropriateness (go after Ford first) and, failing all that, squeeze some money from the deal (make sure Navistar pays for the time and expense of assembling the paperwork). And that's why Sox gets the big bucks.   

The Socialist Republic of Vietnam is on its uppers. The Viet Nam News reports expanding tourism and exports, a stock market that’s expanded by 145 percent and a growing, car-hungry middle class. Auto sales are up 79 percent year on year. Toyota salesman Cao Hong Quang says his customers must plunk down a VND 10 – 15m ($625 – $938) deposit and wait between a week to four months before delivery. The demand also represents a sense of resignation. Many aspiring Vietnamese motorists were hoping that the country's entry into the World Trade Organization (January '07) would trigger a reduction in government taxes on car purchases. By now, they’ve given up waiting and started buying.

Tens of millions of American motorists know the routine: to check if your tires are worn out, insert a penny in between two treads. If you can't see the top of Honest Abe's pate, it's time for new shoes. The Tire Rack says it's time to upgrade the coinage involved from a penny to a quarter, from Abraham Lincoln's head to George Washington's noggin. According to the South Bend, Indiana tire vendors, the switch raises the old test's 2/32-inch (1.6mm) or less standard to 4/32-inch (3.2mm). To justify the switch, The Tire Rack tested a 2006 Ford F-150 Super Cab 4×2. Shod with Abe-compliant rubber, the truck averaged 499.5 feet to stop from 70 miles per hour on wet pavement. The same vehicle riding on quarter-compliant tires stopped almost 122 feet (24%) shorter. We'd like to see more tests conducted using a range of rubber and vehicles in a variety of conditions performed by an organization that doesn't sell tires. Still, point taken. Is it time for tire testers to replace the quarter with penny?

Motor Trend reports that Honda is building a V8 engine, much to the dismay of VTEC worshippers everywhere. Since GM has proven- again and again- that V8 engines are dynamically and commercially useless in front-wheel drive cars, the V8's future in Honda's FWD family is something of a mystery. The all wheel-drive Acura RL will surely be a recipient, since its V6-only configuration (not to mention bland looks and ADD interior) have left it an also-ran in the midsize luxury category. The Ridgeline or its eventual successor is another likely candidate for the eight-pot– even though there are some fanboys who'd prefer to use Ridgelines to create artificial reefs. The most logical recipient of Honda's V8: the NSX. But Honda has been saying all along that their next gen supercar will get a ten-cylinder vibration factory instead. Aside from all of the practical issues, why is fuel-miserly Honda making a V8? Unless it's part of some master plan to soften the blow for refugee NASCAR families ditching the Detroit iron, Honda's motives remain shrouded in secrecy and conjecture.

Who will pay for the REAL ID act? The law stipulates which ID documents states must require before issuing a driver's license, in order for the the document to be recognized as valid by the federal government (social security, ID for plane travel, etc.). Although Congress set aside $40m to pay for start-up costs, the question of who will foot the estimated $11b bill for REAL ID remains unresolved. Speaking to TTAC by telephone, Neil Berro, Executive Director, Coalition for a Secure Driver's License, suggested a partnership. "We believe the feds should pay for the lion's share, the state's should cover some of the costs, and individual license holders should make a contribution." Berro said a token fee would educate citizens about the importance of homeland security. Berro also said a Zogby poll pegs support for REAL ID at 70 percent, but activists from both the left (open door) and right (anti-feds) have united to oppose the legislation every step of the way. 

When faced with a choice between paying $12.95 a month for 170 channels of XM satellite radio or 130 channels of Sirius, many consumers bought neither. In an effort to lure new customers, the merging satellite radio companies are switching to a la carte pricing. So instead of a straight either/or choice, it's either XM or Sirius and THEN a choice between one of eight packages in seven price ranges (with a .25 per additional channel option on a la carte 1). If you thought the two companies would merge content, they have, kinda. "SIRIUS customers will also be able to choose a family-friendly version of SIRIUS programming that includes select XM programming. And XM customers can select a family-friendly XM programming option that includes select SIRIUS programming. These packages will cost $14.99 per month, a credit of $2.00 per month from the cost of the "best of" packages." Confused? You will be.

Automotive safety has improved by leaps and bounds over the years. The Herald Sun reports on the not unexpected corollary: comparing like-to-like, new cars are vastly safer than their antecedents. According to a study of 2.8m real world crashes by Melbourne-based Monash University, larger locally-made cars (e.g. Fords and Holdens) are less safe than smaller European cars, which still "lead the way in safety features." The report lists five vehicles to "avoid in the used car lot:" Mitsubishi Cordia 1983-1987; Ford Falcon XE/XF 1982-1988; Mitsubishi Starwagon/L300 1983-1986;Toyota Tarago 1983-1989; and the Toyota Hiace/Liteace 1982-1995. Interestingly, the official list also scores "How seriously your vehicle is likely to harm another road user."

The love of all things Jeep ranks high in the automotive pantheon of passion. Porschephiles, ‘Vettistas, Hemiheads, Scuderia– they ain’t got nothin’ on Jeepaholia (Hi, my name is Brad and I love Jeeps.) Jeep devotees are a hardy breed, born to be wild. Other than domestic and commuter runs, they ALWAYS take the road untraveled; sneering at mud, chuckling at chuckholes, belly laughing at boulders. Hummers, Land Cruisers, 4Runners and other four wheel-drive pretenders to the throne are equally capable in certain situations, but they lack Jeep’s visceral appeal. So what is it about the brand that keeps the faithful faithful?

In late June, a 17-year-old driving an SUV in East Bloomfield, New York slammed head-on into a truck, killing her and four other recent high school grads in the car. Police claim text messaging (to friends in a following car) moments before the crash was a contributory factor. "The records indicate her phone was in use," Sheriff Phil Povero said diplomatically. "We will never be able to clearly state that she was the one doing the text messaging." Meanwhile, according to new research by SADD (Students Against Destructive Decisions) and Liberty Mutual Insurance Group, instant and text messaging lead the list as the biggest driving distraction for teens. Seventy-three percent of teens admit to talking on a cell phone while behind the wheel. Where do teens pick up these bad habits? Some 62 percent of high school-aged teens told researchers their parents talk on a cell while driving.

Automotive News writes that Carroll Shelby's Children's Foundation– set-up in 2002 after The Man's heart switch– has doled-out less than one percent of its $2.9m stash. (The money is supposed to help children who need organ transplants.) The revelation is bound to embarrass FoMoCo, as The Glass House Gang have provided four new Shelby vehicles for Carrol's charity to raffle and auction. It could also reduce the Foundation's ability to raise funds, as donors learn that their money's destined for a charitable parking lot. Although there are no implications of financial impropriety, and the Foundation now promises to "professionalize," it is worth mentioning that the Texas legend hasn't donated a single dime to his own cause.  

Despite The Big 2.8's mantra that their declining market share and evaporating sales volume reflect a concerted effort to reduce dependence on low-margin bulk sales, Automotive News [AN, sub] reports that Detroit's fleet sales have declined by just one percent during the first five months of '07 vs. '06. Fleet sales still account for roughly 25 percent of GM's total, 32 percent of Ford's and 35 percent of Chrysler's (a slight increase from last year). Into the breach dear Horatio: the transplants. Toyota/Lexus/Scion's fleet sales have increased from seven to 11 percent. Fueled by corporate demand for the new Altima, Nissan's fleet sales rose from nine to 15 percent. One fourth of all Kia sales now sail with the fleets (up from a fifth). And Mazda's fleet sales jumped from 18 to 24 percent of their total. The numbers reveal a stunning lack of resolve by Detroit, and a residual-threatening expansion for their competition.