Ignorance is a bankable commodity. When Bear Stearns stepped-up to the federal begging bowl, the average U.S. taxpayer had no idea who the Hell they were, why they needed money, and whether or not they should get it. Still doesn't. But if/when Ford eventually asks Uncle Sam to open your purse, it may not have what you'd call a winning plot line. Ford's good will with the public has often gone up in smoke (Pinto) or rolled over and died (Explorer). There's another PR debacle looming over the horizon: Flash of Genius. The movie paints a bleak moral picture of the artist once known as the inventor of the working class hero-mobile. We'll be sure to explore whether or not it's accurate in future posts. Meanwhile, make no mistake: it doesn't matter. Except that it does. And will. [thanks to katiepuckrick for the tip]

In General Motors Death Watch 182, I reported on GM's decision to squeeze a little more blood from the stone known as U.S. sales, by raising their product prices by 3.5 percent across the board. I pointed-out that Toyota could eat some more of GM's market share simply by NOT raising their prices or, God help Motown, lowering them. I predicted that ToMoCo would raise their prices, to maintain profitability and avoid any possibility of an anti-transplant backlash. And so they have. The AP [via The International Herald Tribune] reports that Toyota will up prices by a little over one percent– except for the hot-selling Prius (up 2.2 percent or $500). The timing is curious; the news arrived on the same day that GM lowered and extended its employee pricing. In any case, it's clear that Toyota is treading carefully, refraining from delivering the killer blow that's well within their power. They're leaving that for The Big 2.8 themselves.

Chrysler Financial has pulled the plug on new vehicle leases. Given ongoing bankruptcy rumors, the automaker’s co-Prez immediately manned the PR barricades. Jim Press reassured the world that Chrysler is simply diverting lease subsidies into “traditional financing.” That way, “many customers” could enjoy “about” the same monthly payment that they “would have had” in a lease. Meanwhile, ChryCo spokeswoman Shawn Morgan sang the same old song. "Despite the challenges, Chrysler continues to meet or exceed its plan on all financial metrics." C’mon, really?

A clever TTAC commentator scanned internet archives and found this little gem. It's the script for aspiring actors looking to apply for GM's CPO ambush ads. As anyone who's ever watched the carefully-planned spontaneity of reality TV knows, it's no surprise that GM decided how to embarrass private sellers before they embarrassed them, and used professionals. But it's still a bit queasy-making to see the non-pro sellers' replies pre-established on paper. And there are still a few questions about Ambush-gate that I'd like answered. Were the ambushees given a heads-up before taping? Were they given the script? How many sellers did they film who refused to sign a release? How much did GM have to pay to get people to agree to this? How much did this campaign cost? [thanks to AW for the tip]

Click here for PDF of script

Today's New York Times reveals the not-so-startling news that Wall Street's Big Swinging Dicks are not so big and not so pendulous this year. "A review of the latest statements from the largest financial companies based in the city shows that they intend to hand out about $18 billion less in pay and benefits in 2008 than in 2007… It would mean about $10 billion less in taxable income and several billion dollars less to be spent on apartments, furniture, cars, clothing and services. For many investment bankers and traders, year-end bonuses traditionally account for at least three-fourths of their income. But the downshifting of the Wall Street lifestyle has already begun." The general economic downturn is starting to take its toll luxury car sales, with Lexus down 29.8 percent in June, down 14.7 percent for the year. But is it possible? Could Porsche's $127k base Panamera land with a thud? Will Ferrari actually be heading for that moment in their history when they have, gulp, inventory?  

A few weekends back, while putting a few (hundred) miles on an Audi Q7, my wife and I went into the Blue Ridge Mountains in north Georgia. When I programmed our address into the GPS for the return trip, it directed us down the Unicoi Turnpike (part of Georgia Highway 75), which turned out to be full of switchbacks, twists, hairpins and everything else that makes a road fun, along with some beautiful scenery.  The map showed other roads in the area that looked even more fun. We didn't have time to explore them then, but we're already planning a trip back to check them out. So what about you? What is your favorite road for becoming one with your car and having pure unadulterated fun while driving?

Bucking the tide, Honda announced an eight percent increase in profits for the April-May-June 2008 quarter. Profits would have been higher still were it not for the incredible shrinking US greenback. The Financial Times tells us that "the yen's sharp rise compared with early 2007 – it hit a 12-year high against the dollar in March – reduced the value of its overseas sales and turned what would have been a 7.1 percent first-quarter revenue increase into a 2.2 percent fall." With over 50 percent of its business in the stricken US market, higher raw materials costs and a mix-shift away from higher-priced large vehicles to low-cost cars Honda still pulled a profit increase out of the hat. Then, there is what being able to nix the cash-on-the-hood for your best sellers does for a business. Sure the Pilot, Ridgeline, Odyssey and MDX need incentives to move; but the Fit, Civic, Accord and CR-V are all selling with no rebates and no dealer "marketing support". Meanwhile, over at your friendly Saturn dealer there is cash on the hood of ANY 2008. Even with today's good news, financial analysts are spooked by Honda's warnings that the second half of the year is likely to be more difficult than the first half was and that total fiscal year profits are likely to be down by 18 percent. Honda stock swooned two percent today, but GM dropped eight percent.

Just when you thought it couldn't get any more miserable being one of Chrysler's Dealer "Partners" comes the news that the Chrysler Financial is out of the lease business! The Wall Street Journal reports the decision with a note that "Chrysler is expected to brief dealers formally later in the day in a conference call". Boy, it must suck to find this out in the news before getting word from corporate. Nardelli's previous claims that renegotiating bank loans is just a routine matter have been blown out of the water. That $30B revolving line of credit only runs through August, and IF Chrysler is able to get it extended the terms will surely be much more costly than before. Negotiations must be going very, very badly for Chrysler to take one of the most popular sales financing tools off the table. One has to wonder if come August any new lending will be of the Debtor in Possession variety.

I was delighted when I read CSJohnston's comment under the last Podcast intro. Responding to the question "What is a Ford?" he wrote "One could sum up Ford as 'honest.'" Well, exactly. Although plenty of members of our Best and Brightest have upbraided me for suggesting that car companies should not be devious, misleading or spin-obsessed, I am a firm believer that a business must earn its customers' trust. This they do by treating them with honesty, integrity and respect. When Chrysler installed Bob Nardelli at the head of Chrysler, I figured that was the end of that. Bob's cost-cutting at Home Depot was a cynical betrayal of his customers, who were left pressing buttons for attention, rather than turning to find a helpful staff member. By the same token, the chances of finding GM CEO Rick Wagoner alone and unannounced at a BPG dealer are only slightly higher than getting strike by lightening as you're fending off a shark whilst holding a winning lottery ticket. Ford CEO Alan Mulally strikes me as the most consumer-focused of the 2.8's helmsmen, but he's never said anything directly to Ford customers via the media. The truth will set you free, but first you've got to do the same. 

When Chrysler's employees got back from their forced "downtime," they found an email from El Jefe himself. In it, CEO Bob Nardelli welcomed them back and brought them up-to-date on what's been going on (like they hadn't been watching the news or reading TTAC). Boot "em Bob brags on things they've done, from donating to a NASCAR charity to receiving "the top ranking in the automotive industry in the NAACP's annual report card on corporate America's financial relationship with the African-American community." What's interersting: what he didn't say. While he mentions "reports on Chrysler Financial's annual process of renewing its credit conduit ," he doesn't comment on reports that say ChrysCo's in such bad straits they'll be facing much higher rates. He talks about "attractive offers" on Dodge Ram pickups– without mentioning the glut they're trying to clear. And then there's this bit about "creating partnerships and alliances to extend our portfolio, geographic reach and technology capabilities." Could Nardelli be setting-up the troops for another announcement about cutbacks, leading to a sale to Nissan or another automaker? We'll let you know as soon as we hear anything more. [thanks to you-know-who-you-are for the tip]

Click here for pdf of email 

Tata's Nano will officially become the world's cheapest car when it hits the Indian market this October. Sure, Tata blew its 1 Lakh ($2,500) price target, thanks to rising steel costs, but demand is still expected to exceed supply. Or so says Tata Chairman Ratan Tata [via Automotive News, sub]. Judging by the number of variants said to be in development, Tata's putting his money where his mouth is. A diesel version is on the way, and electric or compressed-air models could be next. And adding eco-friendly drivetrains can only help if the Nano actually attempts a launch in Europe in four years, as is rumored. After all, as an EV the Nano's weaknesses (made of cardboard, rolls in crosswinds) are actually strengths (light, cheap). And at the price point, it's more than competitive with the Zap Xebras of the world (pending a convincing road test). This may be why Automotive News Europe (sub) reports that Fiat is considering selling the Nano. "We have held talks about the Nano being marketed in markets where Fiat has already a strong presence," says Ratan Tata. "I am open to consider a partnership." Which means we'll all be able to buy the Tata Nano with a Fiat badge at a MINI store in, say, 2010?

GM's June sales stats were on the catastrophic side of dire. But they would have been a lot worse if not for the automaker's end-of-the-month zero percent fire sale. So… July. Now what? This time Marketing Maven Mark LaNeve is going all Amway on us (minus the multi-level marketing). He's hoping the automaker's [remaining] workers will spread some octo-branded love to a family member, friend, casual acquaintance or anyone with a pulse, really. The Wall Street Journal reports that GM employees can give one employee discount away between now and the end of July. "During this challenging period for people across the country, there's no better time than to talk up our great products and give someone you know an additional incentive to buy GM," LaNeve's intercepted email opined. The current shitty challenging U.S. new car market is "the perfect opportunity to pass this on" an unnamed (what is it with the WSJ and anonymous sources?) GM spokesfolk added. Yes, OK, but HOW MUCH? Seems the Journal forgot to mention this little factoid. We reckon it's about three percent off dealer invoice. Anyone? Bueller? 

GM's press release begins with a rhetorical question: "What would happen if you turned more than 20 undercover film and surveillance professionals loose to show the potential drawbacks of buying a used vehicle that is not manufacturer certified?" And then, without a trace of irony, "the results were not at all surprising." The General dispatched actors posing as car buyers– complete with hidden cameras and release forms– to "ambush" [their words] and embarrass [ours] private sellers with "questions that private party used-vehicle sellers often don't want to hear." During one close encounter of the heinous kind, the actor asks an unsuspecting seller if he can install a phone in the seller's home so he can call for roadside assistance any time, day or night. Other private sellers were harassed about "things like financing and courtesy transportation." "We even bought one of the cars and then tried to return it a few days later with a three-day, 150-mile guarantee," bragged copywriter Jim Hagar. 

[Click here to go to GM's usedcarambush.com] 

Just kidding. Toyota wouldn't say that, what with Motown's implosion about to force the transplants to paint themselves as nativists. But even if they aren't saying it, they're doing it. The Nikkan Kogyo [via Automotive News, sub] reports that the Japanese automaker is shifting non-Prius production out of its Tsutsumi plant to build as many gas – electric vehicles as they can (presumably without working their employees to death). No question: ToMoCo's going Hell for leather. Last year, they sold 281,300 Priora. With these changes, they'll be cranking-out at least 480k units. By the time a single example of GM's Hail Mary-shaped plug-in electric – gas hybrid hits the streets, Toyota will be building their fuel-sipper stateside. ToMoCo will have amped-up (so to speak) worldwide Priora production to 1m unit p.a. Whilst shunning the grammatical consensus on Prius pluratization established by TTAC's Best and Brightest, AN reports that Toyota built "320 Priuses in China last year." What's that all about? 

When I reviewed the '07 Altima 3.5 SE, I concluded by posing the question, "Why in the world would anyone buy a Maxima?" Why indeed. The Pen-Altima far surpassed its big brother in power, handling and styling. Nissan had neglected the Maxima into a noisy Toyota Avalon with a cheap interior. Pity, because the nineties' version was a sort of lower-case-m-5: Japanese bento-box-styling with three tubes of wasabi squirted under the hood. Now Nissan's thrown the old Maxima blueprints out the window of a Nürburgring-blitzing GT-R. Four-door-sportscar? We'll see about that.