One knee-jerk reaction begets another. As reported yesterday, the Canadian Auto Workers (CAW) wasn't over the moon over the announced closure of GM's Oshawa truck plant. Note: Oshawa IS General Motors. Chevrolet's had a plant in the city since the early 1900s, before Oshawa itself was incorporated as a city. The local hockey team is named for GM. GM-Oshawa employed 2600 direct workers, and no doubt accounted for thousands of other peripheral jobs. So when GM CEO Rick Wagoner sounded the plant's death knell, the CAW's members immediately declared war. Today, CTVNews reports that defiant CAW members, fueled by a desperation that only comes when one has nothing to lose, are blockading the offices until further notice. There's no news of reactions from workers at the other Oshawa plant where they build Chevy Impalas and Buick Lacrosses/Allures. Meanwhile, Toyota and Honda, just as recently as last month, announced billion-dollar investments in Ontario. Hyundai/Kia is also considering moving in. Of course, we all know this story, don't we? Soon, Ontario will be another theatre of war that The General will cede to the Asians, during its long, tragic descent into oblivion.

Tata Consultantcy Services may regret their contract to take over Chrysler's information technology (IT) services. Automotive News [sub] reports that Chrysler "asked its non-production suppliers for a 5 percent across the board cost reduction" effective June 1 and effective for one year. "Non-production suppliers" are those providing IT, administrative, custodial and other support services not directly involved with producing automobiles. A statement from Chrysler explained their "recent decision to enact a 5 percent cost reduction on non-production materials and services is part of Chrysler's ongoing efforts to reduce its cost footprint in a highly competitive marketplace." From what we've seen, these "ongoing efforts" also include stiffing delaying payments to some suppliers and asking others to take a 25 percent cost cut. Some of these beleaguered suppliers can't take beatings like this much longer before they follow Plastech into Chapter 11. But maybe that's what Cerberus wants, because it would give them an excuse to take Chrysler in the same direction. 

AutoWeek's Dutch Mandel thinks GM has got it sussed. The mag's Editor & Associate Publisher is full of praise for The General's decision to shut down truck plants, kill Hummer and ramp-up car production. Mandel calls the plan "a brilliant tactical move." That's because it "telegraphs a message that this company understands life as we have known it has changed." (What was their first clue?) Dutch then pooh-poohs the notion that consumers should change/are changing their driving habits. It's better for a "big-time corporate CEO to be proactive and go with the flow of consumer sentiment." He's obviously confused about the difference between being proactive (which implies anticipating a problem and taking steps to avoid it) and a knee-jerk reaction in response to a sudden "oh shit!" realization that you'd better do something fast because you're going down the toilet. Nevertheless, Mandel "applaud[s] all who put collective heads together to make this tough decision– Rick Wagoner, Fritz Henderson, Bob Lutz, all the way down the line." How come GM doesn't list its advertising budget as a PR expense? 

I haven't had an email from my favorite ascot-wearing automotive journalist in quite some time. Yesterday, I held off pinging Jerry– i.e. blogging his Forbes' rant "What Auto Recession?" In this well-timed work, the automotive essayist argued that healthy sales abroad are a suitable salve for domestic doyennes depressed by Black Tuesday. I let it be, because it's so not true. On any level. Today, Mr. Flint has a prescription for Detroit. "Time for Plan B" reads a bit like Plan 9 From Outer Space. Step 1: luxury cars. "Instead of milking big SUVs for profits, Detroit needs to build more cars rich folks will pay big money to own." Step 2: export. "The U.S. is turning into a lower-cost production base… If Detroit can build a serious export business, it will expand the variety of cars it can profitably build." Step 3: build $30k economy cars. "Look at the Prius hybrid-electric vehicle: Without the fancy powertrain, it’s a $16,000 Toyota. Yet buyers wait in line to pay $26,000 for it." As I pointed out in yesterday's GM Death Watch, it's at least three years too late for Detroit to do anything but suffer. Still, it's nice to know our man Flint's thinking outside reality the box. 

In an interview with Teknikens Värld, Volvo CEO Fredrik Arp revealed that he expected Volvo USA will continue to lose customers. Arp reckons you can figure another 10 percent of their business will head for the hills. That's in addition to May's 25 percent drop. The spin: Volvo's sales in North America are not profitable simply because of the weak dollar– implying (somehow) that good sales are bad, er, bad sales are good. Hang on; does that mean Volvo is losing money on [what remains] of its U.S. sales? Either way, it seems the developer of the three point seatbelt will be moving to a former Ford plant in the USA. Mercedes is doing it, BMW is doing it, the birds and the bees are doing it, so why not a profitable North American plant for Volvo? Of course, if they're preparing to sell the brand, maybe someone at the top reckons its best to cut bait and fish. Does the fact that Volvo isn't on the Ford media site's photo finder drop down menu (separate link) tell you anything?

More morning after meshugas: May sales stats reresent the first time in history that the transplants' sales have overtaken Detroit. The International Tribune is the bearer of sad tidings. "General Motors, Ford Motor and Chrysler combined for a record low market share of 44.4 percent, compared with 48.1 percent for 10 Asian brands, according to the Autodata Corporation, the industry statistics firm. Toyota Motor of Japan pulled to within 10,000 vehicles of overtaking GM in United States sales, and Honda posted its highest monthly sales total ever." The Trib also confirms TTAC's Best and Brightest's explanation for the 39.8 percent drop in Priora sales. "The head of Toyota Motor sales, Bob Carter, said the company had been hindered by production constraints and that its most fuel-efficient cars, including the Prius hybrid sedan, were selling as quickly as they could be built. 'Dealer stock for Prius is best measured in hours rather than days,' Carter said." In other words, if ToMoCo had more Priora, they would have sold more retail vehicle than GM in May. Responding to his employer's catastrophic sales collapse, GM marketing maven Mark LeNeve was characteristically upbeat– in a completely downbeat sort of way. "We're somewhere near the bottom," LaNeve said.

In these and following presentations and in related comments by General Motors management, we will use words like "expect," "anticipate," "estimate," "forecast," "objective," "plan," "goal," "project," "outlook," "targets," and similar expressions to identify forward looking statements that represent our current judgments about possible future events. We believe these judgments are reasonable, but actual results may differ materially due to a variety of important factors.

Among other items, such factors include: our ability to realize production efficiencies, to reduce costs and implement capital expenditures at levels and times planned by management; market acceptance of our products; shortages of and price increases for fuel; significant changes in the competitive environment and the effect of competition on our markets, including on our pricing policies; our ability to maintain adequate liquidity and financing sources and an appropriate level of debt; the final results of investigations and inquiries by the SEC; court approval of the settlement agreement with the UAW and UAW retirees related to the 2007 national agreement; negotiations and bankruptcy court actions with respect to obligations owed to us by Delphi Corporation, a key supplier; possible downgrades for GMAC or ResCap by rating agencies; developments in the residential mortgage market, especially the nonprime sector; and changes in general economic conditions such as price increases or shortages of fuel, steel, or other raw materials.

Yesterday was Black Tuesday for the American auto industry. TTAC's bloggers worked their fingers to the bone trying to keep up with an abandoned airport's worth of bad news. And still we didn't get it all. Anyway, it’s official. For the first time in sixteen years (since December 1992), a car has outsold the ubiquitous Ford F-series pickup trucks. Make that, FOUR cars. Last month, [Edmund's] "seismic shift" sent buyers into Toyota and Honda dealerships seeking fuel efficient sedans, rather than gas guzzling pickup trucks and SUVs. The Toyotas Corolla and Camry, and Hondas Civic and Accord, each outsold Ford's venerable tpickup. Feebly trying to explain F-series’ fifth place finish, Ford’s head sales honcho Jim Farley said, “May was a watershed month. We are, as an industry, catching up with the breathtaking choices customers are now making.” Meanwhile, this simple pistonhead asks: how this could be such a big surprise to a FoMoCo executive? 

Ford's "premium" car lineup is engaged in a deadly game of last brand standing. Now that Jaguar, Range Rover and Aston Martin are casualities of war (i.e. someone else's problem), it's down to Volvo and Lincoln. Official denials aside, Volvo's the next to go. Lincoln must carry that weight (a long time). And so we meet the front wheel-drive-based Lincoln MKS, Ford's first post-Carmageddon (karmageddon?) luxury car. Has Lincoln's sibs' dismissal finally liberated the brand from badge-engineered mediocrity? 

Hunter S. Thompson's early work is his best. No, I mean his really early writing, before the inventor of Gonzo Journalism reported on– and then succumbed to– fear and loathing in Las Vegas. Back when Thompson wrote for The National Observer, Esquire, The New York Times magazine and other highbrow literary publications, the former USAF Airman was a wry observer of political, economic and moral corruption. And man, the guy could write. Hells Angels: The Strange and Terrible Story of the Outlaw Motorcycle Gangs was Thompson's greatest work, as passionate and informed a piece of non-fiction writing as you'll ever read. From there, Thompson lost focus. Well, "Dr. Gonzo" became the focus. And that's exactly what happened to the domestic automakers' upper management. At some point, they stopped worrying about building great automobiles and started thinking about… themselves. Their priorities shifted from cars to car-eers. And today's bad news is the result. Just as Thompson reported on the zenith of the hippie culture in San Fransisco, TTAC has born witness to the fall of Detroit. It ain't over yet. But the end is in sight. And it is truly terrifying. As Thompson isn't here to report on this epic tragi-comedy, we will do so in his name. 

Speaking to analysts during a conference call, marketing maven Mark LaNeve said GM "will continue working with [HUMMER] dealers on the appropriate mix of ads, incentives and dealer programs to keep them going and build franchise value." According to an anonymous source (whose information has been independently confirmed), GM has killed the HUMMER brand. The ailing American automaker told its field teams that it's ceased all corporate investment in HUMMER. This includes updates for existing models, the scrapping of the upcoming H4, and a severe cut-back or elimination of marketing and advertising– as contracts allow and media buys can be diverted to other GM brands. The decision pulls the rug from under  171 HUMMER franchisees, including 71 standalone dealers. According to our tipster, GM field ops– who must make nice with the abandoned store owners– are "crapping themselves." Why wouldn't they? Many of these HUMMER dealers have just spent millions upgrading their dealerships to meet brand requirements set forth just two years ago. The first lawsuits have probably already been filed. The rest will follow. Still, closing HUMMER should cost GM less than the billion dollars it spent shuttering Oldsmobile– although that was back when a billion dollars was real money, not GM's monthly cash burn.

Our man Berkowitz phoned it in from the Lincoln MKS ride 'n drive. During our brief de-brief, I asked Justin to write tomorrow's review from a woman's perspective. (Readers annoyed by reverse sexism or bad grammar– "the car handled pretty good"– are advised not to click on that link.) No sale. Anyway, Justin reports that the cetacean-snouted sedan is, in reality, a good looking piece of kit. "The too-small tail lights look great," Berk opined. "Almost British." The suspension also earns the pistonhead's plaudits: "It's soft and relaxed yet controlled and… uh… quiet." Props also fall upon the first application of Ford's new 3.7-liter V6, a 270-horse torque-tastic mill. BUT "the six speed transmission ruins it. It never met a higher gear it didn't like. And straight away too." Justin's full review tomorrow.     

In the July issue of Car and Driver, the BMW M3 coupe beat the Nissan GT-R in a comparison test.  I couldn't understand how this happened, or even why they'd be comparing the two, until I found a copy of this letter:

Dear Nissan,

We want to apologize for not having the GT-R win our last comparison.  Please don't feel bad.  The GT-R really is a great car but since BMW is secretly our parent company, they demanded that their M3 win another comparison.  Actually, we are contractually obligated to have a BMW win at least four comparisons a year….

To be honest, I really feel like writing, "ARGH!!!!!!! $4.59 for premium this morning! ARGH!!!!!!!" Especially because less than two months ago I was bitching and moaning about $3.99 per gallon. Might be time to put me on suicide watch come August. Ahem. Like all of you, as I drive I am constantly scanning the road for cars. Not so much to drive better. Rather, I just love cars. In fact, one of the aspects I most enjoy about Los Angeles is the constant non-stop parade of interesting cars. A few weeks ago I saw nine Aston Martins in a day– and only one was a DB7. I also saw three Ferraris, several Bentleys, a Rolls Phantom and Maserati GranTurismo, the latter being more beautiful than you can imagine. Plus, of course, more Porsches than you can shake a pair of Pilotis at. But aside from the exotic metal, LA serves as a starting point for trends. Let me put it this way — when we reported that Toyota had sold 1 million Priora, I wasn't surprised. At all. Nor was I shocked to learn that while Toyota sales are stumbling, Yaris sales are through the bloody roof. Between yesterday and today, I've counted 17 of the beefy looking pods. What have you been seeing?

GM's May sales numbers were down 30 percent from last May. A disastrous 39 percent dive in truck sales led to so much spin in this month's press release that reading it was like watching a washing machine in full boogie mode. GM blames the sales drop on a number of factors: a "strong May 2007," "a decline in fleet deliveries," the "impact of the American Axle strike" and Hillary Clinton's dismal showing in the polls. OK, I made that last one up. The bright points: the new for '08 Malibu's total sales rose 34 percent (103 percent increase in retail units) and the CTS' total sales climbing by 11 percent (retail sales up 18 percent). The Aveo was up 39 percent total and 22 percent retail, Cobalt was up 15 percent total (but only one percent retail) and Vibe was up 65 percent total with a 36 percent increase in retail sales (so much for declining fleet sales!). Rick Wagoner promises to shift focus from trucks to passenger cars, with cars accounting for 60 percent of their North American production in three years. Judging from May's figures he may want to step up the schedule on that.