When the Presidential Task Force on Automobiles (PTFOA) fired GM CEO Rick Wagoner, it should have ended any debate whether or not the Obama Administration was in complete control of the soon-to-be-nationalized American automaker. And yet the president and his minions continue to assert that the PTFOA’s ongoing interventions within GM’s administration jibe with their preposterous proclamations about a “hands-off” non-managment, management approach. Although the PTFOA left themselves a supertanker-sized loophole—we’ll only mess with “macro” decisions about GM’s corporate governance—evidence mounts that the 25-member government quango is, as the Brits would say, well in there mate. The latest proof of life arrives via our good friends at Autoline AfterHours. On John McElroy’s vidcast, GM’s VP of sales, service and marketing for North America offered fresh insight into the joys of federal ownership.
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Freedom. It’s a blessing and a bitch. As graduates of the 21st century, the average Jane and Joe are loaded with expectations aplenty. Cell phones, computers, and iPods® are a given these days. Credit cards? Perhaps only for gas and groceries. But that’s on the list also. The expenses of the young are laden with a thousand cuts of consumerism. But none of them compare to the cost of a car. So, what should all the members of the family do? Think. Think. Think.
While GM works to convince its paymasters that it’s becoming a leaner organization—as opposed to, say, smaller—rest assured that TTAC is about as lean as you can get without chipping a bone. Full-time staff: myself and the ever-dependable Edward Niedermeyer. The rest of TTAC’s team consists of unpaid volunteers: writers and thinkers whose desire to tell the truth about cars supersedes the need for cold, hard cash. Of course, this description also encompasses you, our Best and Brightest. So thanks again for being the heart and soul of the site. And thanks for your e-mails (now to farago@ttac.com). I’ve received hundreds of tips, links and pieces of insider info. And that was just this week. Seriously. I try to answer every email, but stuff slips through the cracks. For that I apologize. And issue a global thank you for all your help (even as I finally delete ancient emails). Please remember I’m inundated, not indifferent. If it’s really important, multiple pings are encouraged. Meanwhile, thank you for your understanding.
That’s not exactly what GM CEO Fritz Henderson said to BusinessWeek, as part of the bankrupt automaker’s charm offensive. The exact quote was “I know I have to re-prove myself.” So, just as there’s a “bad” GM (the one that latched onto the federal teat) and a “good” GM (the other one that latched onto the federal teat), there’s now a “bad” Fritz Henderson (the one who weaseled his way to the top of GM’s dysfunctional corporate culture) and a “good” Fritz Henderson (the one who wants to reform the stultified system that spawned him). As we say in these parts, good luck with that. Those of our Best and Brightest who’ve seen large companies try to reform their not-so-wikkid ways will recognize the resulting lip service . . .
Questioning the wisdom of photo enforcement can be fatal to the career of a top law enforcement official. Former Texas police Chief Michael Clancey found this out the hard way when he dared to suggest that the College Station City Council should not use red light cameras as a budgetary tool. Clancey filed a lawsuit in federal court last month demanding punitive damages and back wages from the city which, he claimed, violated his First Amendment rights.
In a previous Piston Slap, David Holzman and I discussed:
DH: Are old car reviews doomed to vastly underrate the cars relative to how they drove when new—unless they’ve recently been overhauled?
SM: Yes. I talked to the owner of the 1996 Explorer I reviewed, mentioning the correlation between a terrible ride and 13-year-old shocks. He’s less than thrilled with the idea, even though he hates the ride. So who in their right mind proactively replaces shocks on an old car?
And now, an update:
This Explorer got an upgrade from original Motorcraft shocks to a set of five (yes, five) new dampers from Bilstein. So what changed since the original review?
In my many years as a ghostwriter for a leading exec of Volkswagen, there was one joke that was always shot down. Early VW navigation systems gave you the voice prompt “die Route wird berechnet.” Which translates to “the route is being calculated.” It could also be understood as “I’ll charge you for the whip.” My one-liner that a new VW comes with a factory-standard dominatrix was always suppressed. I wonder why.
I was reminded of my dark past when I opened Automobilwoche [sub] today, only to read that BMW intends to turn their Minis into a gabfest on wheels. Carrying the moniker “mission control,” electronics will listen to the traffic on the car’s CAN bus, and then the gizmo will drown you with clever remarks.
Assume for a horrifying second that you are the chairman of the board of one of the world’s largest auto companies. You also own large chunks of a smaller auto maker. Your executive assistant brings in a letter from one of the top managers of that smaller automaker. The letter says you broke the law, you hurt the company, and he may hold you personally liable for the damage. To the tune of, oh, several billions. Euros. What would you do? Right. Send down security with a moving box and have the guy escorted to the factory gates. Ferdinand Piech, chairman of the board of Volkswagen, supervisory board member of Porsche, and one of the largest owners of Porsche received such a letter from Porsche CEO Wendelin Wiedeking. The letter arrived a month ago. Wiedeking still has a job. But the letter has been leaked to the press. The day before Wiedeking’s day of reckoning.
GM is shutting down production of the Pontiac Vibe at the New United Motor Manufacturing, Inc. (NUMMI) plant in California. GM has sold some car or another based on the Corolla ever since they jointly opened the plant with Toyota. GM doesn’t need them to produce another small car, as they’re looking at plants in Michigan, Wisconsin and Tennessee for that. That’s the first dot. And away we go!
A cash-for-clunker bill, “stripped down” to $1 billion, has passed the Senate. Automotive News [sub] reports that the new bill will go into effect one month after it is signed by the president and will offer $3,500-$4,500 rebates only through November. The spending cap had been set previously at $4 billion. Sen. Judd Gregg [R-NH] led an attempt to strip the provision from an Iraq funding bill that was voted down along party lines. Meanwhile, the AP bemoans the “flagging clout” of the auto industry. And Autocar points out that total European car sales across all brands were down 4.9 percent compared to May 2008. Yes, the much-vaunted European scrappage schemes helped . . . Hyundai (+25.1 percent), Suzuki (+3 percent), VW (+3 percent) and Fiat (+2 percent). Everyone else . . . not so much.
One-time Car Czar candidate Steve Girsky has been elected to GM’s board as the sole representative of the UAW’s VEBA trust fund, reports Automotive News [sub]. Girsky had previously worked on the spin-off of Saturn, which was eventually purchased by Roger Penske. He has also worked at Morgan Stanley, and advised the UAW during the ill-fated GM-Chrysler merger talks. Too bad the Harvard B-School boy didn’t end up at Ford; back in the day, Girsky loved him some Blue Oval . . .
Earlier today, we reported that Nebraska Attorney General Jon Bruning was mounting a legal challenge to GM’s dealer cull via anti-trust regulations. I pointed out that Bruning’s zeal probably had a little something to do with GM and ChryCo car dealers in his patch. A bit of Googling adds the words “and how” to that supposition. Campaignmoney.com lists contributions to the “Friends of Jon Bruning” Political Action Committee. It has to be said: Jon’s not lacking for friends in the car biz. Number two on the list: Craig “Ugliest Web Site in History” Cox of Cox Chevrolet. Baxter Chrysler Jeep Dodge clocks-in at number six. A diligent member of our B&B points out that many of the “homemakers” on the list are attributed to “Anderson.” Talton “Tal” Anderson and his family own a slew of dealerships in NE and western IA, and AZ (and maybe elsewhere). Over on opensecrets.org, we learn that Jon Bruning is number 11 on the list of top recipients of car dealer contributions. Hey! Hillary’s number one! And there’s Joe Biden! Say it ain’t so, Joe! Anyway, nothing illegal here. But it helps to have a scorecard to know why the playa is playin’.
In addition to offering hybrid options across its lineup, Mercedes-Benz will mount a three-cylinder engine in certain vehicles by 2012, reports Motor Authority. Mercedes R&D Boss Thomas Weber does mention that there’s a slight hitch to the plans, namely that “Mercedes is currently looking for a partner to help develop the new three-cylinder engine.” In what appears to be a case of car-before-horse(power), Weber confirms that this undeveloped engine will appear in future iterations of the C-Class, B-Class, A-Class and Smart ForTwo. The American market is not expected to receive three-banger benzes, although a 1.4-liter Kompressor engine is being considered for the C-Class.
The GM/Toyota partnership known as NUMMI builds but one vehicle for GM: the Pontiac Vibe. And it will continue to do so. Until the end of August, that is. GM’s announced that’s when they’ll cease production of the Toyota Matrix’ platform mate at the California plant. The press release states “While no replacement for Vibe production has been determined, GM and Toyota remain in active discussions regarding potential future production at NUMMI.” What’s next for NUMMI?
Cleveland Business News reports that ChryCo will cancel its contract with Cummins for diesel engines slated to power its Ram 1500 line of pickup trucks. This news comes as OEMs are abandoning diesel trucks in droves. Ford and GM have recently backed away from diesel light-duty trucks, while Toyota and Nissan have canceled heavy-duty diesel truck plans. “From a business case, I don’t think anyone can make one right now,” says IHS Global Insight’s Paul Lacy. “We are still negotiating with the new Chrysler group,” retorts Cummins spokesman Mark Land optimistically. “I don’t think they’re forever gone. I don’t think they’ll just throw all of this investment money away.” Right.
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