Big Truck Crash, Accident Caught on Tape !

Congressional funding for the Department of Energy’s (DOE) $25b low-interest loans, designed to help Detroit retool 20-year-old (or older) factories to produce fuel-efficient automobiles, has just cleared the Senate. MSNBC reports that the $634b spending bill (which includes the provision) is now heading for President Bush’s signature, after passing the Senate by a margin of 72 to 12. Detroit’s lobbyists’ have little time or reason to rest or celebrate. The moribund new car market is feeding the flames of their cash conflagration right here, right now. The DOE’s “normal” timetable wouldn’t put the money in their mitts until 2010. Too late. As The Detroit News points out, presidential aspirant John McCain feels their pain. “McCain spokeswoman Sarah Lenti said the Arizona senator ‘is committed to a responsive and efficient  government. In circumstances in which it is straightforward to anticipate the startup of a new program, he would insist that work would begin in advance and be completed in a timely fashion.'” Wiggle much? Only as much as Barack Obama. “After the progress of the past week this is disappointing news from the Department of Energy,” Obama spokesman Brad Carroll said. “Barack Obama understands that these loans are essential for keeping auto jobs here in America, which is why he would do everything possible as president to expedite this process.”

The rich aren’t like you and me. Saying that, it appears that Wall Street’s financial meltdown is bringing some of the money men a little closer to our level. Buried in the middle of a Bloomberg article: car dealer Michael Sheehan’s revelation that the bottom’s dropping out of the used Ferrari market. “I’ve got a street-legal 1982 512 BBi series with 26,000 miles for $129,500,” says Sheehan, president of Ferraris-on-line.com in Newport Beach, California. “One owner, a former Lehman Brothers partner. The day Lehman tanked, he was asking $149,500.” That day was September 15. Sheehan says the date marks the moment when the sticker price on previously stabled Prancing Horses started sliding. By his reckoning, prices for Maranello’s high-maintenance “pre-loved” machines have tumbled 20 percent. So far. “I normally get one call a day from clients asking me to sell their cars,” Sheehan says. “I’m now averaging six calls a day and that number will certainly rise. Nobody needs a Ferrari, they need a house.” A very large one, presumably.

Thanks to all who entered the contest that asked “Does the American Muscle Car Have a Future?” Far be it for Justin and I to declare a winner of that debate, but we can submit the three top finalists’ arguments on the subject for your delectation. Frank Rogers has a very narrow definition of the genre, and he ain’t shy about sharing it: “Transmission wise, a proper stick or a traditional slushbox is all that’s needed at muscle beach…paddle shifters here would be akin to vein augmentation surgery. And sorry, Dodge Charger. Sedans have no place in musclecardom. Leave the four door bruisers in the hands of coppers.” Addressing the same issues, Don Gammil sees semantics as a clear and present danger to the muscle car’s future. “If the formula can’t keep changing (and changing more than [Motor Trend’s Angus] MacKenzie allows for), the term “muscle car” will either become universally misapplied or will die.” And Jared Petroske considers the muscle car as a uniquely American “hands-on” experience. “But what was so great about these muscle cars wasn’t their design or their power… but rather their simplicity. With an engine compartment roughly the size of my first apartment, we could literally climb inside the Impala and take apart its carburetor or adjust the throttle control, the air filter, or whatever part was rattling around this week.” Good points all, but there can only be one winner (of a subscription to Octane magazine). Cast your votes– I mean vote– now!

Click here to vote

The first time I met an American muscle car, my friend Ben was encouraging me to carve the donut in the Sears parking lot just a little tighter and give it just a little more gas. He wanted to hear the 1977 Chevy Malibu’s big block snarl like he knew it could when you pressed the pedal all the way to the floor boards.

Sounding every bit as superficial as the redneck poseur he portrayed, the expression on actor Warren Oates’ face as he uttered those words in the 1971 cult classic “Two-Lane Blacktop” spoke volumes about what a muscle car was and what it was built for.

Yes, you little nimrods! The American muscle car does have a future! Detroit simply needs to stick to a few basic principles. The first thing it mustn’t forget is that any muscle car worth building will have a V-8, expensive fuel or no. To any camel admirers ready to start preaching the gospel of turbonium and other unnatural elements, I’ll just say that no other amount of cylinders or configuration can match the distinctive presence of a V-8 – especially a good ol’ American one. Sound MATTERS. Nothing brings out the hairy chested, knuckle dragging Neanderthal in me faster than a carnivorous sounding V-8. If it’s cammed up, it’s all over. I’d be ready to run the Mille Miglia after a vasectomy.

We’ve resisted blogging the upmarket marques’ brand-extending marketing mishegos: Bentley safes and laptops, Ferrari Barbies, Bugatti thongs, Pagani pagodas, etc. But this one takes the Maserati-shaped confectionery: a Jaeger-LeCoultre Amvox2 DBS Transponder watch. “The $37,900 timepiece, the first mechanical watch that serves as a car key, goes on sale next year,” Bloomberg reveals. Christine Giotto, a spokeswoman for Le Sentier, Switzerland-based Jaeger-LeCoultre, said the watchmaker and the car manufacturer spent 18 months creating the timepiece, whose dial resembles an Aston Martin’s dashboard counters. “A DBS owner can unlock the car’s doors by pressing the watch’s face between the numerals 8 and 9 and lock them with a press between 3 and 4. The timepiece is made from materials including 18-carat gold and ruthenium.” So it doesn’t actually start the car… Is there such a thing as suckeronium?

We’ve asked this question before: what collateral can The Big 2.8 provide to secure their share of the $25b worth of federal low-interest loans offered by the Department of Energy? I mean, Uncle Sam IS going to ask for some sort of guarantee that your tax money won’t disappear down a rat hole, RIGHT? If so, what’s on the table? Ford has already mortgaged the company up to and including its logo. Aside from the Jeep brand, what’s Chrysler got that anyone wants? Minivan production for VW? As for GM, we now learn what The General had to sign over to draw-down the remaining $3.4b of its $4.5b credit facility with Citicorp and JPMorgan Chase. CFO.com reveals the list. “The collateral for the credit consists of North American accounts receivable and inventory of GM, Saturn Corp., and General Motors of Canada; plants, property, and equipment of General Motors of Canada; and 65 percent of the stock of the indirect subsidiary General Motors de Mexico.” Talk about a precedent… if GM continues mortgaging its foreign ops, a C11 will take down the whole schmeer.

Speaking at the Reuters 2008 Restructuring Summit, default expert Edward Altman dismissed the impact of $25b in low-interest federal retooling loans and pegged GM’s chances of avoiding C11 at 50 – 50. Or worse: 55 – 45. “A bankruptcy filing may be the best option for GM to protect its assets and further reduce costs, said Altman, professor of finance at New York University’s Leonard L. Stern School of Business. “If we have a global recession, you know autos are going to get hit and get hit hard, not just GM, and it’s looking more and more like a global recession.” To set the odds for GM’s ability to avoid C11, Altman used his “Z-Score.” The formula for predicting corporate bankruptcies pegs GM at “CCC-minus” or lower, one of the last rating categories above default. “Some [unnamed] studies have shown an accuracy rate of more than 80 percent for the Z-Score.” Which is obviously better than 50 – 50. Too bad the SEC says you can’t short GM (or Ford) until October 2. Anyway, GM responded with its usual iceberg, what iceberg? “We’ve been very clear that bankruptcy is not something that we’re considering,” spokeswoman Renee Rashid-Merem said.

While we await clarification on how the plug-in electric – gas Chevy Volt’s battery/generator/engine interface works, the stakes just got a lot higher. Automotive News [sub] reports that GM has asked the Environmental Protection Agency (EPA) to classify the Volt as an electric vehicle. “Normally, a vehicle is run on an EPA test loop, consisting of both city and highway driving, to measure tailpipe pollutants and provide data for calculating fuel economy. But for electrics, which have no emissions, the government uses a Department of Energy mathematical formula to translate energy use into some equivalent of miles per gallon of gasoline.” And here’s the kicker: the EPA loop is longer than 40 miles. So how do you test a vehicle that– in theory– runs for 40 miles on battery power and then does, uh, something else with its gas engine? While they sort that out– good luck using politics to sway the EPA– the California Air Resources Board has given the Volt “preliminary certification” as an electric. While the prestigious Society of Automotive Engineers considers the Volt a hybrid (imagine that). If the EPA classifies the Volt an EV, GM would have an enormous marketing advantage over the market-leading (owning?) Toyota Prius, AND receive a HUGE boost to the automaker’s federally-mandated Corporate Average Fuel Economy (CAFE) standards. [TTAC’s Michael Karesh has a proposal for a third EPA standard here.]

If cross-country road trips are the quintessential American journey of the 20th century, I’m a quintessential American. I’d ridden thrice between Seattle and Boston by the time I was eight. At 17, I drove from Boston to Palo Alto, then back a year later, in a beat up ‘62 Falcon. I crossed the US another eight times– including once respectively by train and bicycle– while a student at Berkeley. Three decades later, I’m longing to do it again. Unfortunately, the 20th century is over. Since it began, the US and world populations have quadrupled. We’re straining world oil production capacity, and the specter of global heating and acidified seas from CO2 emissions is causing cognitive dissonance in my car-loving head. Driving’s future seems uncertain. But a new company, Better Place of Palo Alto, has a plan.

As we reported previously, the plug-in electric – gas Chevrolet Volt will not, as originally stated, recharge its batteries on the fly. Which raises all kinds of questions about exactly what it DOES do, how it does it, how much it will cost to do it and why they’re doing it the way they’re doing it. While GM didn’t step-up and spill the beans on this mission critical mechanical issue (they were “outed” by Edmunds), an eagle-eyed TTAC reader spotted a post-facto mea culpa at the bottom of a USA Today article on the company’s investment in Flint. “GM initially said the Volt would be able to run 40 miles on its lithium-ion batteries, with a small internal combustion engine recharging the batteries to extend the range hundreds of miles. A top executive said the same thing as recently as last week. But company spokesman Rob Peterson said Wednesday that engineers changed the design so the Volt engine will power a generator that would run the electric motor after the batteries are depleted. A small amount of power from the generator will recharge the batteries, but most will be used to directly run the car, he said. He said bypassing the batteries is more efficient, and GM did not intend to deceive people by maintaining that he motor would only be used to recharge the batteries. ‘At the end of the day, to the consumer, the vehicle will operate much the same way,’ he said.” [thanks to peteinson for the link]

And so ends another week in the autoblogosphere. Of course, the fact that I just wrote that virtually guarantees some gi-normous auto-related story is about to break. (Lest we forget, GM always dumps its worse news into the ether on a Friday afternoon, giving the Wall Street Money Men sufficient time to commit Domicide on a few million brain cells.) I apologize for not posting the three finalists’ entries for the Muscle Car writing contest last week. My best laid plans have gone awry, overtaken by the scale, scope, severity and speed of recent events. I’ll put the unedited rants up this weekend. Meanwhile, I appreciate our entrants’ patience. And your patronage. While I enjoyed writing for TTAC before we had readers or commentators, I get a huge kick out of editing our most excellent contributors’ material and reading the Best and Brightest’s take on all things automotive. The TTAC team’s fought hard to get where we are today. We will continue to maintain our standards of writing, integrity and vitriol during these strange ass days. We’ll will continue to do everything we can to deserve your valuable time, and invaluable trust.

It’s flip-flop week over at Automotive News. While Editor David Sedgwick pulls a Volt-face, publisher Keith Crain is flopping around the bailout issue with the grace of a freshly-landed steelhead. Just a short week ago, Crain took to his keyboard to pen a paean to the Detroit bailout. “Have the auto companies made bad decisions in the past three decades that have led them to this period of peril? Of course they have, and they continue to make bad decisions. But it is in the best interest of the United States to have a strong and viable domestic automobile industry.” This week, the AN strongman has a new take on bailouts, written under the headline “Somebody Should Just Say No.” In fairness, Crain hasn’t properly flip-flopped, he’s just being hypocritical. He may be the biggest backer of Detroit’s federal teat-nuzzling (“hoon”), but when it comes to Wall Street bailouts, the man is all principle. “Those Wall Street companies bought portfolios of bad home loans to make money,” growls Crain. “The companies are at risk because of their bad judgment, and they should take their losses.” In other words, America needs an auto manufacturing industry, but the financial centers that run the world economy we can give or take. “Let’s not jump into decisions that will increase the indebtedness of the American people,” says Crain, arguing that the auto-industry loans will definitely be paid back. And if “the mess on Wall Street is only a distraction from a thorough study of our manufacturing base,” why does Crain think the Wall Street bailout is getting top billing? Because Treasury Secretary Henry Paulson “made millions” on Wall Street and is “compromised.” As opposed to Keith Crain who never made a dime off America’s auto biz, and is as neutral and incorruptible as Solomon himself? Money-grubbing is never fun to watch, but this is just getting ugly.