The NY Times explores one of the great riddles of the automotive world today, namely Detroit’s near-pathological inability to consistently produce quality compact cars. Scribe Rob Sass revisits the development of American compacts, and concludes that in addition to being hurt by low historic concern for fuel economy, compacts “had the bad luck of being produced by chronically undercapitalized independent automakers. These compacts were not particularly thrifty, had no distinctive engineering features and rather than being stylish but sensible, they were simply cheap and frumpy.” And as appealing as many classic American compacts now are as collectibles, the argument rings true.
A new study of alternative energy strategies by Stanford professor Mark Jacobsen [via Green Car Congress] ranks corn-based and biomass ethanol as among the worst alternatives to fossil fuels. According to the study, “the Tier 4 combinations (cellulosic- and corn-E85) were ranked lowest overall and with respect to climate, air pollution, land use, wildlife damage, and chemical waste. Cellulosic-E85 ranked lower than corn-E85 overall, primarily due to its potentially larger land footprint based on new data and its higher upstream air pollution emissions than corn-E85.” These results were calculated by comparing wind-powered battery-electric vehicles (BEVs), wind-powered hydrogen fuel cell vehicles (HFCVs), concentrated-solar-powered-BEVs, geothermal-powered-BEVs, tidal-powered-BEVs, solar-photovoltaic-powered-BEVs, wave-powered-BEVs, hydroelectric-powered-BEVs, nuclear-powered-BEVs, coal-with-carbon-capture-powered-BEVs, corn-E85 vehicles, and cellulosic-E85 vehicles (listed in order of the study’s calculated impacts).
“It’s cheap – not, perhaps, recession-bustingly so, but under £10,000 ($15k) It has some of the dash and cheek of the Mini, but none of the ubiquity, and is roughly two-thirds of the price. And it’s the future of driving. As a US Government report into the motor industry has stated: ‘The shift in consumer preferences towards smaller, more fuel-efficient passenger cars appears to be permanent.’ (The report said this in 1980, a year after giving Chrysler $1 billion of bail-out money to arrest its spiral towards the plughole. Truly, there is nothing new under the sun.)”
An eye-watering death scent surrounds Chrysler going into this week. With a last-ditch bailout likely to focus on GM, and even the hometown cheerleaders kicking around the idea of throwing ChryCo in the volcano, Auburn Hills has all but given up on trying to staunch the flow of bad news. Of all the Chrysler-related bad news, nothing jumps out like the persistent rumors of Pentastar dealers offering two-for-one deals on Auburn Hills Iron. We first heard of this happening in the UK with overstock Avengers, but the phenomenon is spreading to the states. Automotive News [sub] reports that If you buy a 2008 Dakota for $27,590 at Bettenhausen Dodge in Tinley Park, Ill, Mr Bettenhausen will throw in a lightly-used 08 PT Cruiser for your trouble. “The automotive business is no longer about how much money you can make,” says the Bettenhausen. “It’s about minimizing losses. We need to get ourselves to a breakeven point in this challenging market.” Especially when Chrysler’s right there to twist the knife. Automotive News [sub] reveals that the Chrysler Sales Bank is back to plague dealers with yet more inventory they can’t sell and don’t want.
As demand goes, so also goes production. With sales dropping month after month, nearly every major player has been slowing or shuffling production for some time now. Today we are being treated to a pile of cutback stories that is so large as to invite speculation on the timing of the simultaneous announcements. By the way, if you love conspiracy theories and have the [sub], AN’s James B Treece will tell you his favorites. Just remember, all that glitters is probably tinfoil. Anyway, back to the horrible news about how horrible everything is. GM is slashing 250k units from its Q1 production plan, reports Automotive News [sub], a move that affects “virtually” every GM plant. The General Motors that built 885k units in Q1 of this year is looking at a production target of 425k for Q1 2009. GM denies that it will close all its plants for all of January, but according to spokesfolks “it’s safe to say that most of our plants will be closed the week of Jan. 5.” And GM is far from alone. Chrysler, Honda, Subaru and Toyota all have their own awful news to pile up on the mess.
GM first made Saturn’s “strategic review” official in the bailout-begging, condition-floating context, although Lutz swears Ol’ Man Wagoner was on it months ago. Anyway, now that the industry has processed the news, there’s a rash of post-Saturn plans flying around. Our man in China seems fairly convinced that Chinese firm SAIC could make a bid for Saturn and its conveniently independent dealer net of over 400 stores. Another possibility that might be more palatable for GM comes from Automotive News‘ [sub] Richard Truett, who reckons the General could kill two birds with one stone, by “handing the keys to the Saturn brand to GM’s German affiliate, Opel.”
The bailout bill’s demise in the Senate is inspiring all kinds of unhinged commentary this morning. Even by the recently declining standards of discourse, some of the comments we’re seeing around the autoblogosphere are sublimely ridiculous. By the tone many commentators are taking you’d think the US has never overcome adversity before, and lacks the entrepreneurial vigor to survive a highly necessary reorganization and rebirth of our domestic automakers. Rather than calling on Detroit to slow down its little red love machine and find a business plan that’s gonna last, we’re hearing some of the most prominent names in the business calling for a new lender of last resort. Namely that lamest of lame ducks, President George W Bush.
In the last E85BOTD, Farago had the temerity to suggest that perhaps E85 and E10 are DOA. And we have surely come a long way from even nine months ago, when corn-based ethanol was still publicly accepted as an environmentally-friendly fuel for American energy independence. You know, a tortilla riot and media feeding frenzy ago. But mandates are still in place, and as the Chicago Tribune reports, the ethanol industry is awaiting the Obama inauguration with quivering anticipation. After all, Obama has long touted ethanol as a cornerstone of his energy independence plan, even pledging that all new cars would be flex-fuel by 2013. And a quick look at opensecrets.org (tsk, no ethanol breakouts) shows that a number of big names in biofuels gave heavily to Obama and the Democrats. Also, the recent announcement that Dr. Stephen Chu, Lisa Jackson, and Carol Browner will fill key energy and environmental roles in the Obama administration has the biofuel bizz cheering. Of course the all-flex-fuel-by-2013 pledge was qualified with a hearty “if elected,” and these things have a habit of changing. Just ask the UAW.
The New York Times is reporting that the auto bailout bill passed by the House “appears dead in the Senate” today. Opposition from Republican senators is well summarized in an op-ed by Senator Bob Corker in today’s Detroit News. But another reason the bill might fail has emerged only recently, as the Times also reports that the House version of the bill was packed with pork shortly before passage. A provision in the bill asks the government to help municipal transit agencies by guaranteeing the economics of a complex tax shelter known as SILO (Sale In, Lease Out), despite years of efforts by the Treasury Department and the Internal Revenue Service to shut it down and collect billions of dollars of unpaid taxes, interest and penalties. SILO involves buying and then leasing back depreciation rights and assets at the transit agencies, in yet another poorly-understood derivatives scheme. According to the Times “Many of the deals are faltering because of the credit crisis and have put the agencies at risk of having to make large payments to banks and insurers. Last month, the agencies asked the government to back their role in the deals. The I.R.S., which banned the shelter in 2004, offered a so-called amnesty in August to more than 45 corporations that engaged in more than 1,000 Silo deals involving municipal property.” The House bailout bill also includes a cost-of-living pay increase for Federal district judges, reports the Wall Street Journal. In lieu of (what might be an all-too obvious) editorial commentary, let me simply say that if and when this bill fails, the world will not end. The American economy is incredibly resilient, and real opportunities will arise from the creative destruction of a GM reorganization. It won’t be easy, but it couldn’t be more necessary. Good afternoon, and good luck.
..although some US dealers might be nice! Indian firm Mahindra and Mahindra showed this tasty little neo-Willys at the recent Bologna auto show. The the 12-foot long, 1.5 ton off-roader concept sports a 2.5 liter diesel four, making 108 hp and 250 Nm. And since it is just a concept, that’s about all the info that Auto Motor und Sport could dig up.
The meltdown of America’s automakers has frayed its fair share of nerves in the autoblogosphere lately. Which is fairly understandable. Folks who used to get paid for online automotive PDAs are now being forced to confront the fact that their advertisers beloved domestic firms have been failing for years and are desperately trying to survive on federal handouts. And this isn’t easy. From Autoblog’s Comic Life captions (must. not. dignify. with. snark.) to Jalopnik’s ongoing “Carpocalypse Now” series, autobloggers are desperately trying to turn the sad news into good old intarweb lulz. And few walk the tortuous line between credibility (calling Detroit’s woes as they are) and goof-tainment with more schizophrenic abandon than Jalopnik’s Ray Wert. The former Jennifer Granholm staffer just can’t escape his Detroit apologist roots, but his pro-bailout spin is generating enough centrifugal force to launch a Ford Excursion into the stratosphere. And it appears to be taking his already-tenuous definition of the term “irony” with it. Having already inexplicably defended the leadership of Rick Wagoner, and termed the bailout bill “Bankruptcy Lite,” Wert is causing more head asplosion this morning by hailing the House passage of said bill with a Ronald Reagan “Morning In America” campaign video. Dude, check it out: Reagan believed in markets. He would not have seen this unconscionable waste of of taxpayer money as “Morning In America.” And before you even claim that somehow the video is “ironic,” I want you to stop and brush up on the concept. Doing something idiotic and then claiming irony whe you are called out doesn’t make it clever. Irony is found in intellectual tension, not asinine non-sequitors. But by all means, bash back.
Post-Jet-Gate morality is sweeping through the RenCen unabated, as a new spirit of (perceived) austerity has General Motors ditching its corporate pastime: luxury boxes. I mean baseball. GM “may be trying to exit or renegotiate the lease for its luxury suite at Comerica Park, home of the Detroit Tigers,” reports CNN Money. Tigers suites rent for $120,000 to $130,000 a year, and include seating for 18 people, free parking, a private restroom, interior and exterior television sets, a computer with Internet access, pre-game batting practice sessions with ex-Tigers pitchers, and a full catering menu (highlights: market fresh crudite, chilled king prawns, and black pepper and garlic-crusted beef tenderloin). In short, it’s understandable that GM is “carefully evaluating all sponsorships – sports and other – as we look for opportunities to reduce costs during this economic recession,” as spokeswoman Kelly Cusinato puts it. And while the Tigers “try to be as flexible with (GM) as possible,” the General is definitely ditching its sponsorship of the Pittsburgh Pirates, according to the AP. That deal included another luxury box (available for five-year leases at $150k-$275k annually) with undisclosed amenities and menu items. GM spokesman Pete Ternes said the company “is looking at” other Major League Baseball sponsorship contracts that expire at the end of the year, as part of an effort to cut the company’s promotional and advertising budget 20 percent.
Mercedes will debut new “DualView” technology on its S-Class, when the luxobarge receives its 2009 face lift, reports Motor Authority. The system, developed by Bosch and Blaupunkt, allows driver and passenger to view different content on the same screen. The eight-inch display has touchscreen functionality for the driver side only, while the passenger side is controlled by a mini remote. Passenger audio can also be routed through headphones, so your pride and joy can watch Dora the Explorer in peace while daddy swears at the GPS. No word on pricing yet, but it’s an option on an S-Class. If you have to ask, it ain’t gonna happen.
A new study of alternative energy strategies by Stanford professor Mark Jacobsen [via 
An eye-watering death scent surrounds Chrysler going into this week. With a last-ditch bailout likely to focus on GM, and even the hometown cheerleaders 
As demand goes, so also goes production. With sales dropping month after month, nearly every major player has been slowing or shuffling production for some time now. Today we are being treated to a pile of cutback stories that is so large as to invite speculation on the timing of the simultaneous announcements. By the way, if you love conspiracy theories and have the [sub], AN’s James B Treece will tell you 
GM first made Saturn’s “strategic review” official in the bailout-begging, condition-floating context, although 
In 
The New York Times
Post-
Mercedes will debut new “DualView” technology on its S-Class, when the luxobarge receives its 2009 face lift, reports 
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