So we complain quite a bit about ethanol around here, but you might be thinking, what does it really cost me? Well, according to an analysis by the Environmental Working Group, US taxpayers shelled out over $3b in ethanol subsidies in 2007 alone. As if that weren’t outrageous enough, ethanol slurped up two-thirds of all government assistance to renewable energy producers that year. The so-called E10 “blender’s credit” (51 cents credit for every gallon of gas blended with ethanol) racked up $2.9b of the bill, with the Alcohol Fuel Tax Credit adding another $50m. In addition to countless state-funded subsidies for ethanol producers, distributers and refiners. If this is starting to sound like more money than it’s worth, don’t worry. It’s only going to get worse. Ethanol blending mandates were set at 4.7b gallons in 2007, climbed to 9b gallons in 2008 and will reach 12b gallons in 2011. Regardless of whether consumers want it or not. Unscientifically projecting those numbers forward, blender’s credit claims for 2008 could easily top $5b after the IRS adds it all up. Oh yeah, and the Ethanol industry is already asking for $1.5b in “emergency” loan guarantees and short-term credit facilities. And an expansion of blending mandates to E15 and beyond. How great is that?

First to blink, first to lose. That’s what GM’s creditors know. As does Ron Gettelfinger, the United Auto Workers (UAW) boss. And that’s why there isn’t enough time between now and February 17th– the congressional deadline for the next federal loan installment for GM– for General Motors to craft a workable deal to save this company. No one is going to blink. So no one will cave, and nothing gets done. Then what?

The entire autoblogosphere is abuzz over the new Buick LaCrosse. And not just in the pre-show preview, “check this out” kind of way. Or even in the sniggering “guess what the name means in Quebec” way. No, full-service pimping of GM’s latest mid-sized sedan is clearly the order of the day. And a single thread runs through all the breathless commentary, namely the alleged youthful, modern appeal of the new LaCrosse. The message is loud and clear: this is not your father’s Buick. Or, as The DetNews‘s Scott Burgess puts it (in hopes of avoiding the painful Olds legacy), “this is not your grandfather’s Buick.” The Freep opens its paean to the LaCrosse by pointing out that it was designed by “twenty- and thirty-somethings.” “No More Blue Hair!” screams the headline at Jalopnik, who also parrot the “not your grandfather’s Buick” line. But, like the infamous “not your father’s Oldsmobile” ads everyone keeps referencing, all this sound and fury merely cements long-standing brand perceptions in the minds of consumers. And hastens the long-overdue death of Buick

The New York Times has put out a story saying what’s already on many industry observers’ minds: “The historic collapse of the new-car market dragged on in December, raising questions of whether the auto industry will ever again have sales levels that it took for granted just a few years ago.” The easy credit, hyper-consumerism era had established new car sales in the 16 million per year range. But then along came 2008’s dismal 13.2 million units… and the last half of the year was much worse than the first. Even the former “don’t worry, be happy, better days are just around the bend” cheerleaders have given up. “GM’s chief market analyst, Michael C. DiGiovanni, said the automaker was predicting industry sales of 10.5 million to 12 million vehicles for the year.” Long time industry pundit John Casesa says: “After an era of excess indulgence, we’re now entering a prolonged period of conservation. Trading in a car every three years is a luxury that the average American can no longer afford.” Against that background, one can only wonder what fantasies will be embedded in the new, new, newest turnaround plans GM and Chrysler will hand in to the U.S. Treasury Department a few short weeks from now. No matter what their term papers say, Casesa pegs it: “The internal problems of the Big Three are so great, there is no way they can survive without government help for several years.” 

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From WLNS Channel 6 (Lansing, Michigan): “GM Bailout Appears to be Working” “The federal rescue of General Motors appears to be working. It’s a glimmer of hope in a dismal automotive scene. General Motors says it does have enough loan money to survive. Bloomberg News reports a spokesperson for GM says last month’s government rescue should be enough to cover even a worse case scenario for 2009. GM received a four billion dollar check from the treasury department last week with an additional 5.4 billion due later this month and four billion more in February. The company reportedly now says it will not need additional loans unless the economy worsens.” From the Economist: “No end to the nightmare” “Realistically, the most GM can hope for is that it will have done enough by March to keep the drip-feed going until the second half of 2009, when things may start to improve. As for Chrysler—don’t even ask.”

When new acquaintances find out that I cover the automotive industry, the response is often a flood of pent-up questions on the topic. Though much of the interest converges on the future of the American automakers, the future of cars, fuel and mobility in general attract a lot of curiosity. Facile blogger that I am, I usually cop out by saying that telecommuting is the true future of mobility. In reality, the interplay of energy, economics, politics, technology and the environment that defines the cars and fuels of the future is a topic of near infinite complexity. Luckily, two correspondents for The Economist have tackled the issues in a new book entitled Zoom: The Global Race To Fuel The Car Of The Future.

GM CEO Rick Wagoner is out and about today, peddling his company’s ability to be all things to all people save, perhaps, enough customers to avoid bankruptcy, bailouts and brickbats. The AP reports that Red Ink Rick reckons retirees are golden. “General Motors Corp. Chief Executive Rick Wagoner said Thursday the Detroit automaker can survive long-term without cutting benefits to retired workers. Wagoner made the remarks on NBC’s Today Show, where he was joined by United Auto Workers President Ron Gettelfinger. The two made the appearance from Detroit ahead of their renewed labor negotiations scheduled to begin next week.” Nothing like a good long suckle on the taxpayer tit to bring out a little media-pleasing solidarity. I wonder how Ron’s base feels about that one. Prety good if they’re retired, and think Uncle Sugar will cotinue to fuel the gravy train for the next twenty years or so. Perish the thought. Now, about those congressionally mandated concessions…

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I had come into the turn way too fast. The tires broke free. “Oh God, no, I am going to crash this lovely little bus.” And then I found myself in a perfectly controllable four-wheel slide, drifting through the turn at 45mph, glee in my heart. It was probably 1964, and I was driving my father’s pride and joy, a type 40 Bugatti. But not one of the stogy little sedans. This was one of two subscale body prototypes for the ultimate Bugatti, the Type 57S Atalante. The recent fuss over a barn find in England brought our Bugatti fresh to mind…

Reuters reports that Toyota is set to introduce its own version of GM’s OnStar telematics-based service: Safety Connect. The news agency’s story emphasizes… safety. “The service… is designed to provide drivers with emergency support in the event of an airbag deployment or an accident, through embedded cellular technology and a satellite-based navigation system. The system-equipped vehicles also come with an SOS button, through which customers can communicate with emergency call centers for 24 hours a day. In the event a vehicle is stolen, the service also assists in tracking the location of the stolen vehicle.” The AP widens that remit. “The luxury Lexus version also includes driver convenience features such as driving directions and an advanced voice command program.” You hurt your what? (Enhanced voice recognition.) The official press release adds the finishing touch: the Lexus system will be called “Enform,” which sounds a bit like a feminine hygiene product to me. Anyway, there are ramifications here…

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I caught a Google news alert this AM leading to the Detroit Free Press. The headline took me by surprise: “Toyota Sales in the Toilet.” That’s pretty strong language for the MSM. Was this the same paper that headlined GM’s -32.1 percent post-bailout December sales debacle with “An Improvement over November“? Did the Freep’s trash talking header indicate a new, darker chapter in the annals of Detroit cheerleading? I clicked over to a Freep page with a clear not-to-say-ginomrous anti-Toyota, pro-union slant. It’s a blog by editorial cartoonist Mike Thompson. “Japan does have its own version of the United Auto Workers, the Confederation of Japanese Automobile Workers’ Unions, so why aren’t these same columnists and bloggers blaming the Japanese auto union for Toyota’s woes? With a membership of 741,000 workers, it eclipses the 513,000 membership claimed by its American counterpart, the UAW.” It’s a good point, if entirely beside the point. But it’s easy enough to see that Motown’s hometown heroes are happy to put the hate on Toyota– the same hate for which they condemn critics outside Fortress Detroit.

Life’s a drag. If you’re an automobile, the faster you go, the more of a drag it becomes. As early as the 1920’s, engineers realized that a car’s shape was no less important than an airplane’s; it determined the the automobile’s aerodynamic efficiency, which has a major impact on its fuel efficiency. (Cars may not have been born from jets, but the same rules apply.) For mass motoring, decades of cheap gas made automotive aerodynamics more of an optional art class than a required science. Now, with government regulators demanding maximum fuel efficiency, aerodynamics are back in play, headed for the mainstream. Active aerodynamics are taking center stage.

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The Hong Kong Stock Exchange announced that the board of directors of Brilliance China Automotive Holdings Limited ” has noted the increase in share price and trading volume of the shares of the Company today and wishes to state that the Board is not aware of any reasons for such increase in share price and trading volume.”

Brilliance, BMW’s Chinese joint venture partner and maker of its own line of cars (which kind of look like Bimmers) “confirms that there are no negotiations or agreements relating to intended acquisitions or realizations which are discloseable.” In other words: They say they have no idea why their stock would move.

We called around a bit in China. Everybody is likewise flabbergasted. A source we trust, and which shall remain undisclosed to protect his job, says: “There is nothing unusual going on at Brilliance. They will announce some homegrown new models this year. No new BMW joint venture cars are planned.” So why the sudden interest in their stock?

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India’s Economic Times can’t believe it: “Porn baron Larry Flynt says that the US Government should help rejuvenate the industry, which has been bearing the brunt of the ongoing global economic crisis, with a financial assistance of five billion dollars. The Hustler magazine founder has even joined forces with ‘Girls Gone Wild’ video series’ creator Joe Francis to approach Congress so as to sustain the same kind of financial aid as was recently approved for automakers.”

A Bollywood fantasy? No, says Xbiz Newswire, the adult entertainment industry news authority. Xbiz says Flint and Francis are serious. Or at least seriously looking for headlines. Xbiz talked to Larry Flint’s flak Owen Moogan, who made a compelling case: “With the Big Three automakers asking for assistance, and with banks asking for assistance, we thought, ‘Why not us?’ The adult industry is another great American business entity. We represent the all-American pursuit of sexual gratification.”

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An overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. WAS is being filed from Beijing this week, from Berlin next week,

Mitsubishi electrifies PSA: Mitsubishi will supply France’s PSA Peugeot Citroen with electric cars beginning as early as next year, the Nikkei (sub) reports. The French government is providing subsidies of up to 5K Euros, and tax breaks for consumers who purchase electric cars. “With the U.K. and Germany offering incentives as well, Europe is expected to soon become a leading electric-car market,” says the Nikkei. Mitsubishi Motors will provide its iMiEV passenger car on an OEM basis. This plug-in electric vehicle, which is powered by a high-performance lithium ion battery, is slated to debut in Japan this summer. It runs 160km on a single charge. The iMiEV is expected to be priced competitive with conventional gasoline-powered cars in France once the subsidies are taken into account. “Mitsubishi Motors Corp shares jumped 5 percent” on the news, Reuters reports.

Mazda saves cash in cats: Japan’s Mazda said on Thursday it would introduce technology that would slash the amount of precious metals used in catalytic converters by 70 percent in the new Mazda3 model, due for sales globally this year, Reuters says. Mazda said it would be the world’s first application of the single-nanocatalyst technology. The technology will be rolled out globally on certain models. Nissan last year introduced nanotechnology that would halve the amount of precious metals used in the new Cube.
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