So Google is planning to take over Yahoo’s internet search-surrounding advertising, scooping-up 80 percent of the market. Needless to say, the move has seriously pissed-off Microsoft, which scarfs the crumbs off that particular table, and tried to buy Yahoo’s ad interests before Google (not to mention Microsoft’s experiences on the business end of a U.S. Justice Department (DoJ) anti-trust case). Advertisers, who know a cornered market when they see one, are also chagrined (i.e. litigious). The UK’s Independent (discovered through an ad-free Google alert) reports “The Google-Yahoo alliance is scheduled to go into effect next month, but last week the Association of National Advertisers petitioned the DoJ to block it. The trade group, whose 400 members include Procter & Gamble and General Motors, said it would drive up ad rates and hand too much power to Google.” But wait! There’s more GM, if only hypothetically. “The two Silicon Valley giants have argued in the past that outsourcing Yahoo’s search advertising was akin to General Motors using Toyota’s hybrid technology, which does not lessen the ferocity of competition in the car industry.” Anyone remember Rick Wagoner’s “secret trip” to Japan to talk to Toyota? If only…

Followers of this Silicon Valley saga will remember that Tesla decided to install “termporary” transmissions in their lithium-ion-powered Roadsters, so they could deliver something to someone sooner rather than later. Well, later is now. Autobloggreen reports that Tesla is “ready to build real cars.” By that, scribe Sam Abuelsamid means that the electric vehicle maker is finally ready to fit its well-heeled tree hugger-mobile with a proper working transmission, courtesy of the Borg-Warner. Oh, did I say now? It seems that “now” means “later.” The automaker’s spinmeister– who has yet to provide TTAC with its promised test drive– reports that his employer’s delivered 27 cars, with another 23 in progress. But rather than stop the presses and deliver the 23 in-build autos with the new box, eleven lucky Roadster owners will get the old tranny– and a free upgrade later. At some point. In fact, I wonder whether Tesla will give priority to the expensive, time-consuming and technically challenging free retrofits or the [relatively] simple continuation of full production (and msrp) Roadsters? Anyway, the new production fantasy plan is in place. “Tesla will ramp production starts from four cars per week to ten per week,” ABG reveals without question. So, 520 per year @ $102k each? I make that $53m gross income, if Tesla can find 520 willing buyers before some other EV-maker creates the next big thing (Fisker Du?). Can Tesla survive on that? Doubtful. Underpriced and under-developed. Sweet.

First impressions last. And many are formed by the appellation given a child at birth by well-meaning parents. Guys named Percival, Chauncey and Marion know the answer to “what is in a name?” And now, Tiguan. Pronunciation? Is it TEE-gwan? TIG-yoo-wahn? Tig-WAHN? Any way you say it, Tiguan sounds more like some species of sub-Saharan reptile than a girlie soft-roader. Like that boy named Sue, Smuckers or Huckabee, any vehicle with a bizarre name better be able to stand up for itself. So is VW’s new mini-ute good enough to compensate for its cumbrous cognomen (stupid name)?

In T. Boone Pickens’ latest TV campaign, the aspiring compressed natural gas kingpin patriotic oil addiction interventionist points out that most Iranian autos run on CNG. According to T., that’s because they save the oil for export to saps like us. It is a shameless, outrageous manipulation of the facts. The former Texas oilman forgets to mention that Iran imports some 40 percent of its gasoline– which still isn’t enough to satisfy demand. The Iranian government has rationed gas since last year, with predictable consequences. The New York Times reported on the result back in June of ’07: “Unrest spread in Tehran on Thursday, the second day of gasoline rationing in oil-rich Iran, with drivers lining up for miles, gas stations being set on fire and state-run banks and business centers coming under attack.” In fact, according to Iranian analyst Saeed Leylaz, “We are importing gasoline from 16 different countries. The country would be on the verge of collapse if they suddenly decide not to sell us gasoline. The government has to find a way to lower the consumption.” Which leads us to the aforementioned CNG and dual-fuel vehicles. Green Car Congress confirms the country’s switch to natural gas, reporting a sales jump from 20k to 429k CNG-powered cars per year. Even if you trust those numbers (courtesy Iranian Minister of Industries and Mines Ali-Akbar), do we really want to imitate a state-controlled automobile industry? And by you I don’t mean Detroit or T. Boone Pickens, obviously.

All this low-interest federal loans to Detroit (a.k.a. bailout) mishegaas started as a proviso of last year’s Energy Bill. That little codicil tabled $25b worth of loans for retooling automaking factories that were/are twenty-years or older (not-so-coincidentally all but two of which belong to Motown’s mavens). From there, the number under discussion suddenly zoomed to $50b. But all of this taxpayer-funded loot depends on getting Washington to A) OK the $25b B) increase it to $50b. Or, gulp, more. So, where’s the “extra” $25b going to come from? Nancy Pelosi! The House Speaker promised the American public [via Bloomberg] that funding for the loans will be included in the 2008 energy bill, in a second economic stimulus package, or in legislation that will temporarily fund the government until the congressional budget work is complete. “We certainly would hope it will be part of the supplemental at the end of the day,” Pelosi said. “It is very, very important. It is about jobs, jobs, jobs.” Well, that’s three jobs anyway (at, what, $16.6b each). What’s the hurry? “The automakers and their suppliers are trying to get the initial funding appropriated so it’s available in January,” Bloomie’s says. Or, say, before the presidential election, ’cause they don’t trust Obama OR McCain to honor their pledge to support the “loans” when bailout fatigue sets in, someone wants to balance the budget or… bankruptcy. Too cynical? If only.

The Newspaper does it again, exposing the hidden cash grab behind the blogger’s bugaboo: red light cameras. “In 2000 the Los Angeles County Metropolitan Transportation Agency signed a $3,497,960 contract with a Dallas-based firm, now known as Affiliated Computer Services (ACS), to issue pricey photo citations at seventeen railroad crossings. The county further ordered the company to keep a steady flow of tickets, or face corrective action… The contract sets as the baseline that the company must issue 25 tickets for every 100 alleged violations recorded by the machine. These recordings include any number of situations where either no real offense took place, or the driver cannot be positively identified — as required under California law. Nonetheless, if the total number of citations mailed falls under 25 per 100, the corrective steps must be taken to boost the number of citations mailed. In effect, this provides a direct incentive to the contractor to issue tickets regardless of whether the machine properly captured a true violation. There is no penalty under state law for a contractor to guess, for example, a license plate number when the image is unreadable.” As I don’t want to be responsible for mass blood boiling, I won’t tell you about the memo from a Roseville police chief telling his pencil pushers how to hide the hypocrisy. Suffice it to say, the safety argument doesn’t seem to be anyone’s primary concern in all this.

Londoners know (because a fleet of almost 100 is already running): the electric Smart fortwo is an big improvement on the original. It’s economical and smooth, without the wheezy engine and the miserable, jerky transmission of the gas-powered (or God forbid, Diesel) version. Greeny Berliners think: electric cars would be the zero-emission way to go, if you could just charge them somewhere (who has a garage in the city?) Bringing both factors together and hoping that they gel, the German government has started a project with the generic-sounding name “e-mobility Berlin”. It will be the world’s biggest e-car pilot project, involving Daimler and RWE, a utility, which will install 500 public charging stations. The charging stations will have token solar cells, but are basically about coal-derived electricity (take that, global-warming activists!) Daimler’s main motivation is to field-test its e-Smarts, scheduled for massive roll-out in the magic year (guess!) On TV, I saw Angela Merkel, Germany’s often dour, physicist-by-training head of government talk about the project with bright eyes: “It only takes two hours to re-charge the batteries? Just the time you need to go shopping!” As they say, some ways of thinking die hard.

Just had a quick confab with TTAC’s Deep Throat. He makes an excellent point: against what can Detroit’s automakers secure their share of the $50b low-interest federal loans they seek? Ford’s mortgaged everything up to– and including– their logo. GM’s currently paying around $250m a month in interest payments on its current debt, pegged at $40.4b. (Some $9.1b in debt is coming due by January 2010, including $4.3 billion of long-term debt and a $4 billion note owed to a new trust fund for retiree health benefits.) The General has already sold off everything that isn’t nailed down, and much that was. Its foreign ops are its only remain asset of any value (and for how long?). Chrysler? They got nothing worth anything, except, possibly, the “value” of their Jeep brand. Quite aside from the question of what happens to the “old” debt (can the ailing automakers use the federal funds to pay off, pay down or even just maintain their existing loans?), what we’re looking at here is $50b of unsecured loans. In other words, if one or all of the automakers goes tits-up AFTER they suck on the taxpayer tit, John Q. Public will get nothing. Zip. Zilch. Nada. How great is that?

Well, they will be after they read Richard Sox’s article in Dealer Magazine. According the bottom blurbette, Sox is “a lawyer with the firm of Myers & Fuller PA, with offices in Tallahassee, Florida and Raleigh, North Carolina. The firm’s sole practice is the representation of automobile dealers in their quest to establish a level playing field when they deal with automobile manufacturers.” Now where have I heard the term “level playing field” before?” Anyway, if HUMMER is Gox, Sox has got his Gox box socks. “If GM were to give up on the franchise and simply discontinue the manufacture of Hummer vehicles, then as I have described in this column several times before in discussing Pontiac, Buick and Mercury, among others, dealers will have a claim against GM for wrongful termination under the franchise laws. Hummer dealers who either recently acquired the franchise or recently constructed a Quonset hut facility have easily-quantifiable damages resulting from the termination. If GM’s handling of the termination of Oldsmobile is any indication, with the right pressure, GM will settle with dealers that fall within this category.” Maybe after the federal bailout…

You want to know a secret? Justin and I spend way too much girlfriend angering time on eBay looking for screamin’ deals. OK, it’s a pretty lousy secret. But it yields fun finds. For instance, your new Editor in Chief found a 2004 Maybach 57 with only 30k miles on the clock for the low, low (well, not that low) buy it now price of $164k. Sure, that’s more than a house costs in middle America. But we’re all plutocrats here, so what do we care? And remember, these babies are $339k new (about $7,075 a month). Of course, things haven’t been so hot in the plutocrat biz lately. Sub-prime crisis, Russian mob muscling in on the rest of your business and all those divorces. I mean, $164k is a lot of scratch for a used car that has no chance of ever appreciating. Maybe then you should do the smart thing. For about the same number of greenbacks, you could get your driver behind the wheel of a brand spanking new Mercedes-Benz S600. Like the Maybach. it has 12 cylinders, two turbochargers, as much power as certain Greek gods and the hides from several dead cows. Newer chassis, too. No need to be frivolous. But… Maybach. I’m torn. You?

Maybach Drifting

As the U.S. struggles to adjust to fuel prices that the rest of the world has been living with for years, European cars offer the most obvious template for model-line reform. Flexible, fuel-efficient vehicles have thrived on the continent for decades, and the European’s have gotten good at squeezing space for a whole family from compact platforms. So when GM first started showing images of its new Cruze compact, this blogger bemoaned that “while the old Chevy Cruze (Suzuki Ignis) was a tall, flexible wagon, the new model sports a long front overhang and a tight greenhouse.” Long, low and wide, the new Cruze felt like downsized Americana (we don’t need no headroom or no stinkim’ hatchback), rather than a platform built for utility and flexibility. Well, my worries were mistplaced (sorta). GM is showing pictures of its Orlando concept, a three-row MPV based on the Cruze platform and aimed squarely at the Mazda5 and Euro-proven Ford Focus C-Max, headed stateside in 2010. Jalopnik notes that there aren’t currently a huge range of small, fuel-efficient family haulers for sale in the states, but this simply proves that (for once) the General may actually be ahead of the curve. There are likely  shortcomings, including an emphasis on “American” styling that appears to sacrifice space and visibility for the tight greenhouse that is so fashionable here. Still, by leveraging platforms and offering fuel-sipping transport for large families, GM only improves its chances of success. And no, I’m not kidding. Now, get ready for some major brandgineering….

In general, the Swedes are a polite, hospitable people. But doing business with Detroit is enough to test even the patience of a people who discovered good manners on a pillaging run back in 795 C.E. Automotive News [sub] has a lengthy feature on Sweden’s auto business, focusing on the deep disappointment locals feel with Ford’s management of Volvo. One worker says the mood in Volvo’s Swedish assembly plants is “depressed;” people are ready for a little change they can believe in (TM). “People just want Ford to go,” he said. “Ford is not making that much money, and neither is Volvo. Ford needs the money, so everyone expects Ford to sell.” “Ford has not been a good owner,” opines another assembly worker. “I think another owner would be better.” The locals say that whomever ends up holding Volvo ownership, they must keep Volvo’s inherent “Swedishness.” )Husker Du?) “Volvo is very much based on Swedish culture, and that would make it almost impossible to move it to China or somewhere else,” says a local chamber of commerce type. Volvo is crucial to the local economy, and Ford’s plans to bring Volvo downmarket betrays Dearborn’s lack of faith in the brand’s core values. Whether it stays with Ford or moves on, Volvo- and it’s Swedish workforce- are at the mercy of the market. And you thought Michigan was the only locality that stands to lose big from the decline of The Big 2.8. 

Among other topics in today’s podcast, Jonny and I discuss the Audi A3. He and I both agree, we’re seeing them all over the place. But if you’re not deep in Audi country, you almost definitely are not. With sales of 646 nationwide for July of 2008 (the A8 only sold 205 in July, and I see those everywhere too), we’re not exactly talking about a volume vehicle. In fact, while Pontiac is moving 1500-2000 G8s per month, I rarely if ever see those on the road; maybe five of them in total since the car’s launch. But Audi’s expensive little hatchback? Ubiquitous here in the NY metro area, especially on the island of Manhattan itself. And why not? I often remark that NYC is the most European-style city in terms of its layout and density. Buyers in Manhattan want small cars, they want prestigious logos on the front grill, and they want the occasional dose of practicality. It must be one of the only places in America where the Mini Cooper convertible appears to outsell the Toyota Camry. But whatever the reasons, I’d contend that Los Angeles, San Francisco, and New York comprise a vehicular bubble that’s the exception, not the rule, even for big cities in the U.S.

Automakers should start taking a page from the survival strategies of other easily-maligned industries, starting with the slogan “fuel-efficient cars don’t save the world, people save the world.” This blame-deflecting maxim encapsulates the lessons learned by researchers at UC Davis’s Institute For Transportation Studies while studying options to reduce California’s greenhouse gas (GHG) emissions by 80 percent (of 1990 levels) by 2050. Green Car Congress has all the technical minutiae on the study (as usual) for those who care much and work little. Bottom line: the “reference scenario,” which projects current trends forward, predicts a 50 percent reduction in average vehicle fuel economy. But a doubling population projected for the 1990 – 2050 period will cause GHG emissions to rise by 62 percent. Several “silver bullet” scenarios centering on large-scale shifts to biofuels, fuel-cell vehicles, electric vehicles and ICE efficiency improvements all fail to meet the ambitious 80in50 goal. The 80in50 goal can be met, albeit through either second-gen biofuel breakthroughs or a new hydrogen-based transportation infrastructure. The only way to meet the goal with only hybrids and EVs: a radical reduction in miles driven. Even then, hitting the goal exactly is only possible if you exclude inter-state transport. As the report notes, “advances in other vehicle subsectors are largely erased by activity growth in air travel and domestic and international shipping by sea and air.”