Electronic monitoring of motorists is gaining legitimacy, as the federal government explores a pay-per-mile road tax and California mulls pay-per-mile insurance. But will the possibility of improved efficiency and use-based taxation convince drivers to accept on-board electronic spies? Secretary of Transportation Ray LaHood has already expressed his fondness for pay-per-mile road taxation, and the Chicago Sun Times reports that he’s willing to pay participants nearly a grand to help him test the idea.
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Posts By: Edward Niedermeyer
If car nuts have learned anything over the last decade, it’s that few categories are easier to stereotype than the hybrid car driver (thanks, South Park!). But how accurate are these images we carry of hybrid drivers as left lane-clogging, smug eco-weenies? A couple of recent reports indicate that we still have much to learn about our high-mileage friends. For example, TheCarConnection reports on a study which shows that hybrid drivers drive more than average, receive more moving violations, and incur more collision costs. And if that isn’t surprising enough, consider an online poll showing that hybrid drivers don’t even care about the environment.
OK, not exactly the same. GM’s CEO Fritz Henderson will earn $1.26 million this year, according to New GM SEC filings obtained by the Freep. That’s 27 percent less than he earned in 2008, but a whole lot more than the $1/year that ousted CEO Rick Wagoner was forced to accept. CFO Ray Young will earn $720,000, a 15 percent pay cut. GM’s controller Nicholas Cyprus will take home $522,000, which is eight percent less than he earned last year. Board members will earn $200,000 as a base retainer, plus, if applicable, $10,000 for service as a chair of any board committee; $20,000 for service on the audit committee, and $150,000 as board chairman. That’s unchanged from pre-bailout levels, before GM’s board was also forced to take $1/year as a bailout condition. In other words, the Iaccoca act of the last nine months was just that: an act. Because paying executives is more important than paying back taxpayers. Meanwhile, AutoObserver notes that the executives in charge of winding down old GM will be making $835/hr and $555/hr. Good times.
Like most people under the age of 40, I never read car magazines. Actually that’s not true. I’ve been stealing copies of Auto Motor und Sport from my dad for years. Even after its long trip across the Atlantic, the anal-retentive German’s anal-retentive car magazine still manages to scoop the American mags on many of the most compelling industry developments. But the real draw is the mag’s road testing, which really confirms every stereotype of Teutonic attention to detail. No metric is too mundane to be measured, graphed and scored… think Consumer Reports for people who actually like cars and think OCD medication is for the weak. On the other side of the equation is evo magazine, which is hands-down the best enthusiast-oriented car magazine.
Note: this video showed a salesman pretending not to understand a Spanish speaking customer. It was removed after someone sent the dealer principal the link to TTAC. His mea culpa comment is below.
Your automotive industry bailout probably just became a little more expensive. Automotive News [sub] reports that the House of Representatives has passed a spending bill including provisions to reinstate dealers culled during GM and Chrysler’s restructuring. The measure now moves to the Senate, where 24 co-sponsors of a similar bill should have little problem rounding up votes (although Senate Majority Leader Harry Reid tells the NYT that the bill is not at “the top of the agenda in the Senate at this time”). The problem is that President Obama has urged congress to dump the reinstatement bill, indicating that he will almost certainly veto it. Meanwhile, a non-legislative “solution” to dealer grievances is still being touted as the ideal solution. Which indicates that GM and Chrysler will have to pay off dealers, a move that would likely cost taxpayers even more money.
Or, as the Man Of Maximum puts it at Fastlane, “It Seemed Like A Good Idea At The Time.” “It” being the idea of rebadging the Pontiac G8 as a Chevy Caprice.
“With my new “marketing” hat on, upon further review and careful study, we simply cannot make a business case for such a program. Not in today’s market, in this economy, and with fuel regulations what they are and will be. I know that we’ll get a lot of complaints from G8 lovers, because I’m one of them. And the product guy in me is complaining as loudly as anyone. But the marketing guy says there’s no case. With budgets being what they are for the time being, the resources must be allocated elsewhere.”
Here’s the real auto sales stimulus: your choice of a gas or gun voucher. Max Motors owner says the deal generates a lot of publicity (oops!) and “really angers liberals.” Check out the broad range of reactions to this sales gimmick at Max Motors’ website (via USA Today).
GM claims to be calibrated to break even at a Seasonally Adjusted Annual sales Rate (SAAR) of 10m sales. Which assumes that GM’s portion of those sales will remain steady. As we’ve learned today, that’s not likely. GM’s market share is being pummelled by bad news, bailout backlash, and (according to the Merrill Lynch report) poor product replacement rates. While GM talks up the Volt, discusses a Prius fighter and touts an American-made compact, its major product push has been centered around a single dying brand (Buick) and its single new product, the LaCrosse. Yes there’s a new Equinox, but has anyone noticed? Camaro may be the choice of bold, audacious lemmings everywhere, but for how long? It’s gut check time . . .
Bank Of America-Merrill Lynch have released their annual “Car Wars” report, and it predicts slumping sales for GM and Chrysler. GM’s market share of 22 percent last year is seen shrinking to a mere 15 percent, which is significantly lower than the 18 percent number that GM admits to. The real butt-clencher? Merrill Lynch based its calculations on a 14m unit SAAR, which is much higher than the 10m SAAR that we’ve been seeing through the first half of the year. Which means GM’s losses could be even worse if we don’t see a return to those sales numbers soon. Even at a 14m SAAR though, the three percent discrepancy between GM’s numbers and Merrill’s would amount to GM selling half a million fewer autos than expected. The report places blame on weakness in GM’s new-product pipeline for the projected drops. GM’s Tom Wilkinson fires back at the Freep, arguing “we understand that analysts get paid to try to predict the future… but that doesn’t necessarily mean they are going to be right.” Gosh, can’t anyone just trust GM?
America’s traditional method for clunker-culling was to load old cars onto a truck and ship them to market in Mexico. That changed last year when Mexico banned the importation of vehicles built before 1998. Now, Mexico’s president Felipe Calderon has announced a scrappage scheme for his country, in hopes of jumping on the car sales bump bandwagon. According to El Universal [in Spanish, Hat Tip: Gato Negro], the program
“will grant 15,000 mexican pesos [about $1,000] towards the purchase of a new car. The clunker must be 10 years old at minumum. Initial budget will be 500 million pesos, expandable to 1,000 million. The cost of the new car should not exceed 160,000 pesos. Also: The car must be assembled in Mexico [or another NAFTA country] or imported by one of the seven brands that have a car factory in Mexican territory.”
Meanwhile, the Wall Street Journal quotes analysis which shows that Europe’s 6.8m oversupply for 2009 will grow to 7.2m in 2010, because “scrappage schemes are significantly distorting the dynamics of the European market.”
Facing a House vote tomorrow on legislation that would repeal GM and Chrysler’s dealer cuts, President Obama is urging congress to not interfere with his auto industry restructuring. Automotive News [sub] quotes an Obama statement calling the cull “a critical part of their overall restructuring to achieve long-term viability.” The Obama statement alleges that “it would set a dangerous precedent, potentially raising legal concerns, to intervene into a closed judicial bankruptcy proceeding on behalf of one particular group at this point.” Because intervention on behalf of one particular group may only be done during a bankruptcy, by the government. Rep Steven Latourette, one of the bill’s sponsors, predicted that his legislation would pass the House “by a wide margin.”
GM’s heads of public relations, Steve Harris, and research and development, Larry Burns, have announced their retirements today. Automotive News [sub] spins the move as a “shakeup,” but notes that Harris was already on a contract extension. Burns, meanwhile, is burned at the stake as a hydrogen advocate. Despite Burns’s $1b hydrogen initiative of 2002, “the goal of an economically viable fuel cell vehicle by 2010 foundered on the lack of a national hydrogen fueling system,” notes AN. And as goes the political system, so goes GM. Meanwhile, Group Vice President and General Counsel Bob Osborne also announced he was returning to private practice, while former president of North American operations, Troy Clarke, is still at GM with no job title.
Bloomberg has a piece that is chock full of analysts imploring Mitsu and Suzy to pack it up and leave the American market. Both firms rage, rage against the dying of the light, but the numbers are not pretty. Mitsubishi sales are down over 50 percent in the first half-year, continuing a slump that has gone uninterrupted since 2003. Suzuki is down a whopping 6o percent in the first half of 2009, and neither firm seems to have the products to turn the bad news around. Rumors of Suzuki’s Swift coming stateside, the Kizashi and an FWD version of the SX4 hatchback don’t seem to be the “consistent, sustained effort” that analysts say Suzuki needs. Mitsubishi President Osamu Masuko says “we will never give up the U.S. market,” but there’s little indication of what’s coming down the pipe, besides a $40k EV. Should these two stay and fight? Merge? Leave? What say you?
You know if The Freep acknowledges that union local desk jobs were “an icon of labor patronage, in which jobs were handed to friends of elected UAW officials,” it’s probably true. Now, over 400 UAW workers are being moved from these low-stress jobs to the factory floor, where their union bretheren will welcome hem back to the real world of auto assembly. “These people had cushy jobs,” says one worker at Chrysler’s Warren Truck Plant. “Some of them could use a taste of life on the floor to remind them we still make trucks around here.” Credit for cutting these “cushy jobs” goes to the PTFOA, which has been putting pressure on the UAW to reduce its costs and complexity. “The UAW had little choice but to agree,” explains a GM spokesperson. The savings from cutting these positions aren’t expected to be large, but the PTFOA and GM seem to agree that the symbolism is important. Certainly the UAW members who were already working the line agree. The only downside? Without the ability to hand out do-nothing desk jobs, being elected President of the local may become more difficult.
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