From The Detroit News:
Pelosi said Democrats want automakers to “thrive,” and she hasn’t ruled out additional support for automakers if they show that they are “viable.”
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Posts By: Robert Farago
When President Obama championed the federal stimulus bill, transportation and infrastructure projects accounted for a relatively small chunk of the total tab ($787 billion). BUT the Powers That Be hyped it hard; the Department of Transportation’s (DOT) piece of the pie was going to generate more than half of the 3.5 million jobs the Obama administration promised to create or save (don’t get picky). ProPublica’s crack investigative squad now reports that the DOT is having a little trouble shoveling the spade-ready jobs out the proverbial door. “Of the $48 billion in transportation stimulus funds, so far DOT has paid out only $3.4 billion, or 7 percent of the total,” according to Sunshine State Rep. John Mica, the top ranking Republican on the House transportation committee. DOT spokeswoman Jill Zuckman had an answer for that one. “The amount of money spent on highways isn’t as important as the amount of money that’s been approved, which has reached $19.4 billion.” Do people really think like that? Holy shit. It gets worse . . .
A little birdie tell us GMC is raising its prices. Yes, raising.
GMC will announce revised 2009 model year prices effective for all Sierra and Yukon models produced on or after October 1, 2009. All model dealer discounts will be reduced. Dealer invoice amounts will increase accordingly.
Dealer price schedules will be available in GM Dealerworld under Sales &/Or F&I Tabs effective October 1, 2009. Reference administrative message #VSF20040006 (dated February 26,2004) for more information regarding this web site.
Sold order price protection eligibility dates are dictated by the customer and dealer order dates as follows:
-Customer order date must be prior to the date of the price increase.
-GM systems order date (date dealer enters in GM system) must be no more than one work day after date of the price increase.
These units will be invoiced at prices in effect at the date of production; however, the dealer open account will automatically be credited for the price increase once the unit has been delivered.
I recently received an email from the now bi-weekly AutoWeek offering me a FREE YEAR! “Now, for a very limited time, you can take advantage of our lowest rate ever. For just $19.95, you can enjoy TWO YEARS (52 issues) of your favorite magazine! That’s 90% off the retail rate–just 38¢ per issue!” Despite “bi-weekly race results, news straight from the auto show floor and unbiased editorial reviews,” I’m holding out for the last 10 percent discount, and the removal of the two-year requirement. That’s not as strange as it sounds; we’re getting reports that Car and Driver subscribers are getting the buff book long after they’ve let their subs expire. Subscription income sacrificed on the Alterman of advertising? Perish the thought! Meanwhile this from Automobile: “An exclusive limited-time offer has been reserved for you from Automobile Magazine. Through October 9, you can get a full year of Automobile for only $10! That’s $49.88 off the cover price – an 83% savings!” Clearly, these guys are toast. The question is, what, if anything will replace them? Personally, I think it’s the ideal time to start a new car magazine; one that redefines the genre with coffee-table compatible paper stock, world-class photography and scintillating, insightful reviews and features (a la The Rodders Journal). Or is it time to stick a fork in the whole car mag thing?
A TTAC source asks us to perform the following mental exercise:
“Just imagine that you’re a car salesman and you come into work this morning. Your boss says we have a bunch of new incentive programs you need to learn. And here they are . . .”
An anonymous TTAC Tipster has made it possible for me to fulfill my promise to our Best and Brightest. Click here for a pdf list of all Chevrolet and Cadillac dealers slated for closure. Our secret number cruncher created the document by using the information recently provided by another, long-time TTAC source. Thank you both for helping this website realize its raison d’etre.
Chrysler, the U.S.-funded, Italian-run, formerly bankrupt American automaker is leaking its product plans, ahead of their official unveiling in November. Automotive News [sub] confirms that Sergio Marchionne’s minions have decided to spin off Ram trucks into a separate brand, removing the company’s most profitable product from underneath the Dodge umbrella. For once, AN (or at least its mysterious person of interest) understands the full implications. “The separation of the Ram truck brand will allow Fiat to make Dodge more of a performance car brand, the person said. But the move could also make it easier for Chrysler to spin off its truck business down the road if a continuing slump forced Fiat or U.S. officials to consider such a step.” Did you see that? “U.S. officials.” Pay some attention to the Presidential Task Force behind that curtain! In any case, Chrysler and GM are heading into a perfect storm: continued market share erosion, new product constipation and chaos and, sopra tutti, cash burn.
Shame on CarMax. While I trust these guys enough to buy an SUV from them, I’m not so happy about their decision to play the estrogen card for PR points. “Buying a car is a hassle for women, according to a recent poll conducted for CarMax, Inc. (NYSE: KMX), the nation’s largest retailer of used cars. When asked about their last car buying experience, a fourth of the women who responded felt a quick and effortless transaction was most missing, according to a new [online] survey of more than 500 women. Fair, low pricing and having a trustworthy salesperson were also cited as the other top factors missing when buying a vehicle.” And this is different for men, how? Rather than concentrating on what unites us, CarMax is focusing on an invidious distinction, pandering for PC brownie points. Check this: the survey asks “Thinking about the last time that you bought a car, which of the following was most missing?” (Most missing?) Only two percent said “Respect” and 13 percent said they’d never bought a car. What does that tell you?
Make no mistake: GM and Chrysler went into bankruptcy horrendously over-dealered. GM was carrying more than twice Toyota’s 1500 dealers (with a lot less than twice the market share). The automakers’ needed to cut their franchise network down to size for reasons elucidated here on numerous occasions. The fact that the culled dealers are dogging the federally-subsidized carmakers for cash—well, you, really—is neither here nor there. It’s on YouTube! In their own words . . .
As the Brits say, it never rains; it only pours. The New York Times reports that pickup truck sales are falling into the same bottomless pit that swallowed-up full-size SUVs. Apparently, “the precipitous decline in pickup sales has been greater than many auto executives had expected.” Sure, ’cause the domestic automakers’ suits are so good at forecasting sales, or preparing for their forecasts to be wrong, or reacting when their forecasts turn out seriously awry. I’m not so sure the decline contains as much precipitation [sic] as the Old Gray Lady suggests. “When pickup sales were at their peak in 2004, the segment accounted for nearly 15 percent of all new vehicles sold. This year, pickup sales represent about 10 percent of the overall market.” And remember: even with enough cash on the hood to test their suspensions, pickups are still Motown’s number one money maker. How scary is that, Mr. GM owner? Anyway, it’s the cultural change that intrigues . . .
We TOLD you there would be internecine warfare.
Before I leave TTAC, I will find and publish the list of GM dealers culled during the “transformation” from Old GM to New GM. In sworn Congressional testimony, GM’s CEO Fritz Henderson promised—begrudgingly—to provide the list of dead dealers trading to Senator Jay Rockefeller. This on the same occasion that Henderson pledged that New GM would be completely transparent to its new owners (the U.S. taxpayer). Post-hearing, Rockefeller’s office refuses to talk to me about the list; they no longer answer my calls. So either Rockefeller received the list of GM’s dead dealers from the nationalized automaker and suppressed it, or GM reneged on its promise to provide the 411. CNN’s Chris Isadore and others in the MSM couldn’t give a shit. They see the list as proprietary information critical to GM’s competitiveness. I see this as a travesty. GM and its political cronies are withholding critical information from consumers considering GM products. Consumers who own the company. So . . . I’m getting close.
More than a year ago, the ethanol industry hit the “blend wall”: the difference between what they could produce and what the market wanted to use. This despite billions in tax credits: direct and indirect federal and state subsidies. All enabled by a federal mandate mandating that the ethanol boys brew nine billion gallons of renewable fuels in 2008, rising to 36 billion by 2022. And then the gas price bubble burst and environmental impact studies arrived, revealing corn-for-fuel as a carbon positive endeavor. The ethanol industry pretty much curled-up into the fetal position. The small players went belly-up. The big boys—including Archer Daniel Midlands (whose corporate jet ferried candidate Obama around the Midwest)—put their hopes into E20.
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