After another week of digital dedication to automotive truth-telling, TTAC West is going undercover to explore the “hybrid lifestyle.” A hybrid and a yurt? Smug alert!
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The internet chatter on GM is growing more intense by the day. We’ve seen this before. For at least a decade, the company and its camp followers have mounted a disinformation campaign ahead of bad news. Only these days, there’s precious little good news with which GM’s spinmeisters can obfuscate. And critics of the nationalized automaker grow more vociferous by the day. Even the normally obsequious automotive press is no longer adverse to a little kicking-a-man-when-he’s-down routine (although any discussion of kicking GM to the curb is still the story’s Voldemort). New GM’s October sales numbers are about to hit the screens, and it ain’t gonna be pretty. GM’s first full financial report will emerge thereafter; the hard numbers on the company’s cash burn will trigger major mainstream media alarms and raise fresh (stale?) questions about GM’s viability. And then what? Will heads finally roll at RenCen? Will America’s automotive English patient continue to receive copious quantities of hospice care? Will the bailout issue bite Barack’s army in the ass come mid-term time? Meanwhile The Detroit News reports that tensions are simmering, . . .
Well he would say that, wouldn’t he? For one thing, David Cole is a Big Three scion, the son of former GM president Ed Cole. For another, Cole’s “Center for Automotive Research” (CAR) is funded by unspecified automobile manufacturers (guess who) and equally secret “labor organizations” (guess who). You may remember CAR as the organization whose statistically corrupt pre-bailout report took center stage, what with its wildly exaggerated predictions of plague, pestilence and famine—if the feds didn’t throw money at the ailing American automakers. And now Automotive News [AN sub] reports that David is telling Uncle Sam that New GM’s decision to cut thousands of dealers doesn’t make sense. “These cuts didn’t make any sense to me,” Cole told a government toady, whose visit may or may not have been stimulated by a missive impossible to the Presidential Task Force on Automobiles. “By pulling out, GM and Chrysler are giving a beachhead to Ford and some of the imports.” Beachhead? Dude, they’ve been eating Detroit’s lunch for decades. Anyway, speaking of pulling out . . . “Cole said he has no research expertise or experience with dealers, but that his personal interest in the issue was piqued and that he has spoken with a number of dealers and GM executives.” Glad to see that the guardians of our tax money are kow-towing—sorry “consulting” with all the right people in their endless pursuit of political accommodation.
The AP reports that Johnson City, TN police have arrested Christopher Walls on two counts of theft under $500. The Volunteer State po-po said the 41-year-old mechanic was tampering with parked cars at restaurants, then charging helpless, hapless owners to help start their sabotaged whips. “Police said Walls charged between $40 and $200 to get the vehicles running again. “Police suspect there are other victims. They’re urging anyone else who thinks they were scammed to call them.” They also said that anyone who receives an offer of on-the-spot mechanical assistance should be wary, and that a call from the Fraternal Order of Police asking for a contribution is in no way a similar sort of deal. Just kidding. They didn’t say that. At all. Wouldn’t even think to make the connection. Obviously.
At RM’s London classic car auction this was the “standard” fare of painstakingly restored Aston Martins, Ferraris and Mercedes Gullwings . The hall glistened and gleamed with well polished beauties. The star of the show, however, turned out to be a rusted, dilapidated and altogether disheveled former statesman. A 1969 Mercedes–Benz 600 Pullman Landaulet, chariot of popes and princes, had been transported from a surrey barn and shoved into the far corner of the auction hall. With withered red leather interior and an engine that could barely stay in the chassis, much less start, the Pullman could hardly compete for the interest of the crowds with 250 GTOs and DB5 convertibles. That is, until bidding got underway.
I’m not going to tell you incentives are going away. They’re part of the game, but they can be better managed than they have been in the past
GM Sales maven Susan Docherty in the WSJ.
Russian oligarch Oleg Deripaska meets with Fritz Henderson, German Gref of Russia’s Sberbank and Siegfried Wolf of Magna. The state department had previously denied Deripaska a US visa for undisclosed reasons, but according to the WSJ, the FBI arranged for Deripaska to visit the US because “they were getting interesting information from him.” Deripaska denies any cooperation with US authorities.
The recent revelation that congresspeople have been successful in coercing GM to rescind dealer closures in their districts, has the rest of our elected representatives (not to mention GM itself) sitting up and taking notice. In a conference call with Michigan’s congressional delegation, Fritz Henderson said GM was close to a deal which would restore a number of “mistakenly” closed dealerships. But GM hasn’t met with rejected dealers in weeks, and the Committee To Restore Dealer Rights is unaware of any such agreement. “[Henderson] was very vague, and the plan sounded inadequate to me,” Michigan Republican Hoekstra tells Automotive News [sub]. “He explained, for instance, that they might reopen some franchises if they found errors, but he didn’t say what those errors might be.” Henderson also rejected the dealer demand for compensation of $3,000 per vehicle sold in 2006, 2007 and 2008, further supporting suspicions that GM doesn’t have a deal at all. So what is happening?
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Ever since GM announced that Saturn would be winding down, there’s been a niche-brand-like hole in the Canadian car market. And rather than learning from GM’s struggles, Toyota’s jumping right in to repeat them. The Star reports that ToMoCo have announced that Scion is going to Canada. Toyota will start off with 45 dealerships in urban settings (makes sense for an urban marque, I suppose); 20 in Toronto, 18 in Montreal and 7 in Vancouver. It’ll start off as a “store within a store” format. “The next generation of young car buyers is carving its own unique social and cultural experiences and Scion dealers will be part of their lifestyle,” Larry Hutchinson, Scion’s director in Canada, said. By slathering sensible cars which appeal to empty-nester boomers with youth-oriented marketing? Yeah, that’s been working well so far…
It is unfortunate that Edmunds.com has had nothing but negative things to say about a wildly successful program that sold nearly 250,000 cars in its first four days alone. There can be no doubt that CARS drummed up more business for car dealers at a time when they needed help the most.
The Department of Transportation’s Bill Adams lays into recent Edmunds.com analysis showing Cash For Clunkers could have cost as much as $24,000 per vehicle sale [via CNN]. But one man’s negativity is another man’s constructive criticism. After all, Adams doesn’t touch the heart of the matter: the program’s cost per vehicle, and Edmund’s analysis (like all analysis) was educated guesswork. Luckily, CNN was able to shed a little more light on how Edmunds came up with their numbers.
Comments to last Tuesday’s Curbside Classic pointed out the lasting stylistic influence of the BMW 6 Series on such cars as the Acura Legend coupe. That reminded me of this out-of-focus shot I took of a 1990 Infiniti M30 last winter. I try to stick to cars 25 years and older anyway, but this is a car that has really fallen off the radar, as well as my camera’s auto-focus function. The M30 was a left-steering version of the Nissan Leopard, which in turn shared its platform and basic configuration with the legendary Nissan Skyline R31. Performance was quite another story: the M30 had a 162 hp version of the Nissan 3 liter V6, and came only with an automatic. Given its weight of 3330 lbs, performance was modest. But with the availability and interchangeability of Skyline and Nissan 300Z turbo components, the M30 is the easiest way to end up with that unique JDM-Skyline look on these shores.
Frank Weber, the man in charge of GM’s electric vehicle line, will be leaving GM for a senior leadership at the soon-to-be-sold (or not?) Opel. Weber previously worked on Opel’s development of GM’s global mid-size (Epsilon II) vehicle line, before becoming the head of GM’s electric vehicle development program in March 2007. Weber is the second senior executive in GM’s global electric, hybrid and battery development organization to leave in a month, following Bob Kruse’s departure at the end of September. And as with Kruse’s exit, the sound bites coming out of GM seek to portray the loss as no big deal. “There is a huge difference in the Volt program from when I came here,” Weber tells Bloomberg. “The entire organization has inhaled what we do here.” In reality though, Weber’s defection makes the introduction of the Opel Ampera (as the Volt will be known in Europe) even more difficult than it was already shaping out to be.
With apologies to Douglas Adams:
Stress and nervous tension are now serious social problems in all parts of the Galaxy, and it is in order that this situation should not in any way be exacerbated that the following facts will now be revealed in advance.
GM’s sale of Opel to Magna/Sberbank is being held up by the European Union, which is looking into whether the German government unfairly favored Magna’s bid. But while the interregnum plays out (the EU will decide by November 27th), GM has plenty of time to develop a case of seller’s remorse. After all, GM’s VP for Global Engineering Mark Reuss recently told Autoline After Hours that Opel is completely integrated into GM’s global product development, and that the relationship “won’t change.” Does that, as Business Week’s David Welch asked, mean GM will keep all of Opel’s development capacity while reducing loss exposure to 35 percent? Reuss had to change the subject, but it’s obviously not the case. With Daewoo under fire, GM would clearly prefer to keep Opel’s development capacity integrated, and keep its intellectual property out of the hands of Russian automakers. And with German newspapers reporting that GM’s board is considering a “plan B” to keep Opel within the GM fold, Opel’s workers are threatening to strike.
Car dealers are some of the most politically connected people in America. As we reported yesterday, more than a few axed GM store owners demonstrated their political muscles by forcing the nationalized automaker to rescind their franchise terminations. Further back in time, we highlighted the Obama administration’s “stealth” dealer bailout: a car dealer-specific Small Business Administration (SBA) loan program. Under the program, the SBA guarantees 75 percent of a car dealer’s floor-plan line of credit, ranging from $500,000 to $2 million. The SBA’s network of private-sector lenders make the loans. In theory. In practice, it’s been what the Brits call a damp squib. Although Automotive News [AN, sub] fails to put any hard numbers to the program’s failure, they acknowledge that the SBA dealer deal “has had trouble attracting lender participation since its May launch.” Needless to say, the “answer” to the SBA lenders’ entirely understandable reticence/prudence is . . . bigger loans and more federal backing.
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