Since taking over as Chrysler's purchasing boss in January, John Campi has whipped the Cerburian dog into an appetite for hardball supplier tactics. And the pressure to hoist the black flag and begin slitting throats is coming from Cerberus, who have mandated a $1k per vehicle cost reduction within three years. Automotive News (sub) details Chrysler's nasty legal battles, from the shockingly crass Plastech debacle to (relatively) petty suits against giant firms like Magna and JCI. When asked about his law-firm-fueled approach, Campi talks a blunt party line. "I will work with every supplier I can in a collaborative fashion to help them become profitable and help us. "But we don't have the wherewithal to prop up a supplier simply to keep them running. I won't do it." And oil, steel and plastic price hikes be damned. Supplier lawyer Fred Smith of Warner Norcross & Judd characterizes Chrysler's negotiating style as "we don't care who is at fault, you will contribute; give us money if you want to maintain a parts relationship." Acknowledging that several suppliers have threatened to stop production over price negotiation, Campi has only tough talk for the malcontents."If a supplier wants to push us because of their fear, then they are violating the contract in place, and I will take the necessary action," he glowers. "And I say, I'm not going to let you shut down production. If you're serious about this, you have to live with the legal consequences." But, after showing off all the lawyers in his Rolodex, Campi seems to remember that Chrysler has to at least appear to care about its middle- to long-term, and pledges "equally shared benefits." Meaning there's plenty of nothing to go around.

When Chrysler CEO Bob Nardelli was Chief Executive Despot at the Home Despot, he hung his monstrous paycheck on such gimmicky products as the Peter Arnell-inspired ergonomic fire extinguisher. now ensconced in Auburn Hills, Nardelli is banking on the RamBox storage option to move its all-new Ram in the teeth of a stiff anti-truck headwind. And that ain't working out so well. Despite Nardelli's and Co-President Jim Press's relentless "game changer" hype, the Ram Box is not good to go. Automotive News (sub) reports that Dodge has not priced the RamBox yet, but "dealers say they have heard discussions of an option price of $1,600 to $2,100." But the New Chrysler wants dealers to order the option without knowing what it will cost, a limb the dealers aren't eager to walk out on. "Until I've seen the RamBox and how it's priced, you're not going to be getting any orders from me," says one Dodge dealer. "I think the RamBox is going to be a big seller if it's priced reasonably. I don't want a bunch of trucks sitting on my lot without it. What the hell is the problem? Where's it at?" This is probably not the way Chrysler was hoping the RamBox would change the game. "We're trying to get a balance between volume and price," says Marc Seguin, senior manager for Ram marketing. "It's a tough thing to price. We're trying to understand how much volume we can sell." Meanwhile, the dealers are left fuming. "To launch the truck without the RamBox is just ridiculous," says another unhappy pusher-man.

GM's $350m investment in Cruze production capacity in Lordstown, OH was big news for the "American Revolution." A compact car, built in America… and all it took was $80m in taxpayer-funded incentives to GM.  That, ladies and gentlemen is what passes for a PR win-win these days. In fact the good vibrations were flowing so freely at the big Cruze announcement that Ohio Lt. Gov. Lee Fisher even told Rick Wagoner that if he commited to another Lordstown model by Thursday, the good people of Ohio would "double the incentives." The Detroit News reports that Fisher was "joking" but goes on to say that GM did take the offer seriously enough to go on the record and decline the kind joke/offer. But the unrequited-love awkwardness isn't stopping the DetN from wallowing around in the Cruze-y feel-good. Check out their soft-focus paean to GM's once-proud tradition of actually employing Americans, featuring proud Hamtramck workers gushing lines like "We've got such an incredible history. I mean GM, of course, but I guess I'm thinking of my family too." As the kids say, Vom.

If you happen to be looking for a quick fix to GM's and Chrysler's myriad woes, the closest you'll come to a silver bullet is good old Chapter 11. But Rick Newman of US News And World Report's Flow Chart blog seems to think a quiet little housecleaning bankruptcy isn't even an option any more. Newman argues that unlike, say, airlines, the automakers can't declare bankruptcy and still expect consumers to buy their expensive, warrantied products. He cites a CNW Marketing Research study which shows that 80 percent of respondents would suddenly lose interest in a brand if it declared bankruptcy. Then there's the chance that Washington D.C. could just decide that Detroit had the bad times coming and not make with the bailout. And unlike the recently-rescued financial giants, GM or Chrysler wouldn't bring the whole economic party crashing down around them if they did fail. Finally, Newman reckons Detroit's complex issues can't be solved with a simple reorg. After all, GM and Chrysler are slashing costs and squeezing suppliers in the status quo. The real issues, argues Newman, are revenue and products, neither of which will be fixed by bankruptcy. Taken together, the arguments seem convincing, but there are a few details being left out. Like the epic cash burn, the need to slash dealer franchises, and Washington's apparent openness to a hefty bailout. I, for one, am not completely convinced that (at least for GM) a Chapter 11 filing isn't the way to go. Chrysler, on the other hand, should just be taken out back and shot (Chapter 7). What say you?

If business and government both agree that hydrogen is the future, they must be right, right? Well, the "Hydrogen Road Tour 08" has just completed the first hydrogen-powered, cross-country road trip despite the fact that there are only 60 hydrogen stations in he country. So how did the public-private publicity tour manage this feat? Well, they didn't actually. "There were stretches without hydrogen fueling stations when the vehicles were carried on flatbed trucks," reports Reuters. The longest was a 937 mile jaunt from Rolla, Missouri to Albuquerque, New Mexico. But wait, cries DOT Administrator For Research and Innovative Technology (really) Paul Brubaker, all those hydrocarbons were not combusted in vain! One of the goals of the tour was to actually demonstrate the need to build more fueling stations. So, y'know… failure is success. Not to be out-Orwelled, the Department of Energy put out its own fawning "Suggested Talking Points For The Hydrogen Road Tour" (PDF) . There you can learn that the DOE has purchased a fuel-cell Chevy Equinox, and that it is refueled at a Shell station. Furthermore, "data collected from this effort will be integrated with data from the National Hydrogen Learning Demonstration to validate real-world performance." Which is important, because you'll want to know how often you'll have to be towed in a flatbed truck between fueling stations. Unless the hydrogen-producing firms behind the tour get their fat government checks to build an expensive new infrastructure. And all this despite the fact that in a best-case scenario, automakers will only sell about 2 million electric vehicles powered by hydrogen fuel cells by 2020 according to the National Research Council.

With the auto industry in the midst of wrenching change, the most valuable resource is brainpower. A Bureau of Labor Statistics study says that the U.S. could face a shortfall of 160k engineers by 2016, but JCI-Saft CEO Mary Ann Wright thinks the situation could become even worse than that. Arguing that the BLS number doesn't take retirements into account, Wright tells MLive.com "I think that's too low. Today the United States is not producing the right skill sets." Part of the problem could be the efforts to educate engineers to be better communicators rather than technical geniuses. John Fuhs of the auto supplier firm Swoboda says "We try to hire engineering people for our company, but typically they come up way short in basic skills. They made a very big point of switching 25 years ago for more rounded engineers, and that's what we got. They all want to be project managers now, but they don't know the science or what's going on to get the job done." But the problem doesn't end there, as too few American engineers are graduating to fill demand in other industries as well. So the industry has to either inspire newly-graduated engineers or hire away talented engineers from other countries. Or simply continue the trend of outsourcing product development abroad. 

Hyundai's U.S. niche is just below the the Toyondissan's offerings. Nowhere is that role more valuable than in the burgeoning hybrid segment. Considering the forthcoming Honda hybrid is set to be priced several thousand dollars less than the industry-standard Toyota Prius, Hyundai's pressed to deliver the hybrid Sonata at an even lower price point. And so they have. Li-on-powered, no less. Reuters reports that Hyundai could release a lithium-ion hybrid version of its Sonata as early as (you guessed it) 2010. Unlike other li-ion hybrids set to launch in that most magical of automotive years, the Sonata will not be a plug-in model. With Korean hybrids deliveries beginning next year, any early-adopter glitches should be resolved before sales ramp up stateside. Meanwhile, liquid-petroleum-gas-hybrid versions of Hyundai's Avante hatchback are also set to go on sale soon in Korea, although its chances of coming stateside are almost nil. Similarly, Hyundai VP for Product Development John Krafcik rates the possibility that they'll sell their Indian-built i10 city car stateside as "very unlikely."

Not content to simply rebadge a Chrysler minivan, Volkswagen has putting on a brand-destruction clinic by pairing its Routan with a brand new marketing gimmick incentive. If you inexplicably want to pay extra to have a VW badge on your Dodge Caravan and put a down payment on a Routan, VW will give you $1,500 back. Except that it won't. The Wall Street Journal explains: "The money — held by Upromise Inc., a subsidiary of SLM Corp., which also owns Sallie Mae Bank and is the largest maker of college-funding contributions– can then be moved into a college savings fund known as a Section 529." This would be bad enough if VW were simply admitting (via cashback) that its cynical Chrysler rebadge is DOA, but instead it's offering an incentive that makes Chrysler's "$2.99 gas" gimmick look reasonable. The weirdest part? VW claims that 6k buyers have already signed up for the offer. But with analysts projecting Routan sales capacity of 20k to 40k, Volkswagen has lots of suckers still to round up. Let's just hope that claiming a single-digit-percentage slice of the shrinking minivan market is worth the epic brand dilution that the Routan– and its ridiculous incentive– are sure to cause VW.

Given its "what economic downturn?" price tag and profit-sucking development costs, you'd think VW would just let the Bugatti Veyron slip into unobtainable-classic status. After all, developing a new Veyron makes about as much sense as a creating an all-new Phaeton, right? Nein, Bugatti Boss Dr Franz-Josef Paefgen tells Autocar UK that a new Veyron will be arriving around 2012. "We will be staying on top of everybody else and we will not be producing a smaller, or cheaper car and we will not be moving volumes up. Bugatti customers are very extreme people," says Paefgen. But not so extreme as to rule out a little platform-sharing, apparently. Bugatti boffins are considering building a Rolls-Royce Phantom competitor based on the next-generation Bentley Arnage platform. Word has it they're even considering fitting the luxobarge with "advanced biofuel technology… and even diesel." And just to prove that everyone who bought a Veyron thinking it was the best of the best are saps, Bugatti is also rumored to be building a 1200 hp Veyron GT model. Though Bugatti denies these rumors (what, they think 1k hp is enough?), Autocar says it has learned that customers have already put deposits down on GT versions. Any guesses as to how many million extra those 200 hp will set you (or the Sultan of Brunei) back?

The decline of the US auto market is bad news for OEMs, but as usual shit flows downhill and auto suppliers could take the brunt of the impact. Sven Gustafson blogs an A.T. Kearney survey at MLive.com which says North American auto suppliers could lose up to $50b between 2008 and 2011. Caught between weakening demand for new vehicles and rising commodity costs, the survey estimates that the supplier sector will need $38b in incremental capital over the next five years. Another report by Grant Thornton LLC estimates that the hard times could put a full third of suppliers at risk of bankruptcy. Unsurprisingly, firms in the SUV supply chains face the highest risks thanks to their reliance on weak US sales. "The full impact of very low truck and SUV production in the second half of the year and any new production cutbacks this fall – something we believe is likely – will only make supplier cash flow problems more difficult to manage," saiys Grant Thornton principal Kimberly Rodriguez. And in the past these woes could have been turned around by acquisitions or mergers, but now the key to survival seems to be diversification beyond the auto industry. With credit tight, massive retoolings and turnaround plans also aren't in the cards for many suppliers who have little choice but to focus on successful core business to survive the rough patch. "I'd say things are being looked at very carefully," says Doug Grimm, CEO of supplier Citation Corp. "I think everybody's wondering if we've seen the bottom yet."

Auto Motor und Sport reports supercar sales jumped 45 percent between 2002 and 2007, to a record 165k units per year. The German buff book details a study by the Instituts für Automobilwirtschaft (IFA) at the Hochschule für Wirtschaft und Umwelt (HfWU) in Nürtingen-Geislingen. It estimates supercar sales will increase by another 20 percent to 200k units by 2015. The IFA says much of this growth will be driven by newly wealthy criminals and dictators status-seekers in emerging economies like Russia and China. It also credits (blames?) "the spiral of exclusivity." "Many premium manufacturers have lost exclusivity by widening their model ranges. The small-volume firms can offer the exclusivity that is so important for supercar buyers." So although the horsepower wars of the 1990s may have reached their zenith with the 1001 hp Veyron, we can expect a steady stream of four-wheeled unobtainium– with carbon tax surcharges greater than the GNP of Belize.

Struggling Malaysian automaker Proton has been hunting for a major OEM partnership for some time. Rumors have linked the company to PSA and VW. GM snuggled-up to Proton last year, meeting with management and shareholders. According to The Motor Authority, GM's recent financial "challenges" haven't discouraged the The General's Prez for S.E. Asian Ops from continuing to play footsie. "If Proton wants to talk," Stephen K. Carlisle announced. "We are ready as we are always interested about collaborating with them." GM may be hunting for [another] low-cost, entry-level car for emerging markets. As Proton also holds a majority share of Lotus, Hethelmania may also be taking hold. But c'mon. Another brand? And what about the money question? "GM would be able to make a financial commitment for a collaboration with Proton," Carlisle told The Star. "If it made business sense now."  Yeah, sure.

The IBM Institute for Business Value polled some 125 automotive executives and "thought leaders." Their final report [via Green Car Congress] concludes that "sustainability concerns" will rule the industry's future. In fact, by 2020, they figure all new cars will incorporate some form of hybridization. Respondents were less bullish on hydrogen, daunted by "the added challenge of building an entirely new infrastructure." The study also predicts the rise of the two-car consumer, diving "a primary vehicle that best meets their daily needs… [with] the option to change to a different model, as needed." Telematics (e.g. remote vehicle prognostics and active safety), data downloads and streaming media; and powertrain innovations are all in the cards. The report tells industry types to embrace new mobility models, improve the retail experience, simplify complexity, build international partnerships and execute globally. Wow, huh. Meanwhile, I'm heading over to Tomorrowland to see yesterday's future today. 

When The National Motorists Association blog noticed a large number of pro-red-light-ticket-camera editorials coming out of the Orlando Tribune, they decided to investigate. Turns out that every one of the pro-camera pieces was written by a single member of the Tribune's editorial board, George Diaz. Well wouldn't you know it: Diaz is "the point man on editorials pushing for red light camera legislation in Florida" for the National Campaign To Stop Red Light Running. The lobbying group is funded by the fine people who make and sell red-light-ticket- cameras. Needless to say, the Tribune has ethical standards which state that Editorial staffers "should avoid situations in which their activities in connection with any group or cause could be perceived as influencing what the Sentinel publishes or broadcasts." What's more, "when conflicts of interest are unavoidable but not obvious to readers, they should be disclosed in the story." And of course, Diaz did neither. For shame.

In a recent interview with the Weekly Standard, Iowa Senator Charles Grassley weighed-in on the food-for-fuel debate. "If part of our problem is that the Chinese are going to eat meat and you've got to have corn and soybeans to feed the Chinese their meat, then why isn't it just as legitimate for the Chinese to go back and eat rice as it is for us to change our policy on corn to ethanol?" Despite the growing consensus (so to speak) that ethanol is not an environmentally-friendly fuel, drives up food prices and contributes to world starvation, Grassley isn't willing to surrender the $4.5b of federal ethanol subsidies and the farm lobby support that goes with it. The Weekly Standard condemns Grassley's position. "As this 'let them eat rice' soundbite made clear, the debate over the food versus fuel issue is about as undignified as a full out real food fight at a summer camp cafeteria."