As a privately held company, Chrysler doesn't have to tell anyone anything. But in an enterprise as vast and well-charted as the American automobile industry, you can run, but you can't hide from market reality. Automotive News [AN sub] raises an interesting question: why is "fast moving" ChryCo asking its dealers to pre-order products five months in advance? In a July 3 memo to store owners, Chrysler claimed demand for its Belvidere-built products had 'skyrocketed.' Really? While Patriot sales were up 5.5 percent in June, Caliber sales tumbled by 43.6 percent, and the Compass crashed 38.8 percent. Apparently, "Chrysler is taking aggressive actions to realign our product volumes to coincide with market demand." Really? Chrysler killed Belvidere's third shift in March; it's currently running on two shifts with overtime. Would orders in hand inflate Chrysler's worth to a potential buyer? Anyway, buried in the article: an assertion [by AN] that "Chrysler is trying to stick to its guns on slashing unprofitable fleet sales." According to ChryCo, they've cut fleet sales by 20 percent. In truth, even the rental fleets don't want the cliff face depreciation cars, SUVs, minivans and pickups (despite a recently revealed, post spin-off, long term contract with Thrifty). And the automaker's retail/fleet mix is getting worse, not better. AN reckons fleet sales account for about 35 percent of Chrysler's total– not including dealer fleet sales.

The "bubble" is the point in a poker tournament where the next player out will not win any money– but the rest of the players will. A player "on the bubble" is on the verge of ignominious defeat. Automotive News [sub] reporter Amy Wilson deploys the term to flag Ford's plans to kill development of its large, rear-wheel drive (RWD) platform. Or not. "[Ford product chief Derrick] Kuzak told Automotive News last week that he is reconsidering the program. 'We need to understand the role of those vehicles, given the change in the market mix,' he said. In the meantime, Ford is developing those vehicles at full speed, he said." So it's all systems go! Right until it isn't. Lincoln dealers taking delivery of the new meh MKS await Ford's final decision with bated breath. Meanwhile, here are three more decision Kuzak hasn't made, but might. 1) sticking a turbocharged, four cylinder engine into the F-150 2) adding more European-sourced small cars to the lineup and 3) amping-up EcoBoost engine production past the 500k mark. Note: Lyndon Johnson said a bad decision is better than no decision. 

Even though I disagree with him more often than not, I like Terry Box's writing. If such a thing is rhetorically possible, The Dallas News car correspondent thinks outside-the-box. He's also a true champion of blue collar consumers. So when I caught a link to his coverage of GM CEO Rick Wagoner's appearance at a Dallas luncheon– where Rabid Rick's dropped his infamous and ineffective "inaccurate" bankruptcy rumor remarks— I knew we'd get some additional insight into Wagoner's thinking, or lack thereof. Box flags the fact that Wagoner reckons GM's Arlington will be GM's sole SUV supplier. "We think the segment will be big enough to support a plant," Mr. Wagoner assured his Lone Star State admirers. Think? But here's the real money shot: ""We used to do cars and everything else – with everything else being trucks. Now, we are moving toward three channels: cars, trucks and crossovers." Parsing that, it seems Wagoner still doesn't get it: America's future is predominantly car-shaped. Or does he? "Our job now is to get our cars more profitable," Wagoner announced. And how, pray tell, is he going to do that? Oh sorry. The answer would require a coherent turnaround plan with publicly stated goals. Why start now?

According to The Gainesville Sun, Mark Sexton was the director/actor for the local Hippodrome State Theatre. In August 2004, Alachua County hired Sexton as their official, part-time spokesman, at a salary of $50,298 (now $59,475). After a couple of tropical storms, County Manager Randall Reid authorized a county-paid car for Sexton AND "unlimited use" for his personal Prius. So now… "The accident happened on Christmas night 2006. Sexton was on vacation in Miami when he struck Miami Beach resident Felix Lopez while Lopez – who was dressed as a woman – was crossing the street. A police report states the officer was unable to determine who was at fault and that no injuries were reported at the scene. Sexton did not tell county officials of the accident until about a month later, when a legal notice was sent to the county. Lopez has since sued the county. Commissioners discussed whether to defend Sexton in the suit and eventually decided to do so. Sexton said he had consulted an attorney and threatened to sue if the county did not defend him." Needless to say, this is just one example of the nationwide scrutiny suddenly facing government workers' use of taxpayer-funded vehicles (e.g. LA County's $433m fleet of 12,780 vehicles) now that gas prices have soared. As for Sexton, "he doesn't remember how much gas was in the tank when he left for Miami but added he is pretty certain he bought gas with his own money during the trip." And no, this is not the plot of a Carl Hiassen novel.

You want to talk about high gas prices? Hertz used to charge its customes $7.99 a gallon to refuel a car. In an interview with The New York Times, the rental car company's chairman and chief executive says Hertz has modified the charge to stop gouging their customers [paraphrasing]. "We are now reducing that to the pump price, which is $4 or so, plus a one-time fee of $6.99," Mark P. Frissora reveals. "We also have a fuel-purchase option. In the past, if you elected to buy the tank of gas in advance, we charged a 10- to 20-cent premium on that tank. But now we give a 15-cent discount to whatever the price is at the pump." Hertz is hoping new customers will cover the lost revenues. But what about the old biz, the vacationeers facing pump shock? "In general, gas prices going up is not a positive thing. However, it is not nearly as negative as you might imagine in rental car land. Typically, the rental car itself and gas are no more than 10 percent of the overall cost of a vacation. We are finding that people aren’t cutting vacations right now. You would think that with gas prices being high, there would be a deterioration, but we haven’t seen that." Yet. In other news, Hertz has just 3k Priora in its Green Fleet; Toyota's hyrbid's residuals are safe. For now. 

I was a little taken aback by the new Mercedes SL65 AMG Black Series' 661hp. I remember when my M5's 400hp was considered excessive. These days, German uber-brutes' horsepower and torque figures are higher than Jeff Spicoli. Obviously, the numbers have no relevance to anything whatsoever. But the whole "how much power does anyone really need anyway" has never been more important– what with CAFE regulations demanding 35mpg fleet averages by 2020. Tom and Ray addressed the question today, when an F-150 refugee obsessed about the power of a Ford Focus vs. a Nissan Sentra. Ray reckons "If you're like most people, and usually drive alone or with one other passenger, and death-defying highway stunts aren't a regular part of your routine, almost any four-cylinder car will provide adequate power." True?

Oh dear. When USA Today car critic James R. Healey finds a car underwhelming, you can bet it has very, very little to recommend it. In fact, Healey is less impressed with the big Lincoln than our Justin Berkowitz. Where Berk praises the MKS' mission critical waftability, Healey says the MKS' ride and handling is "not so good. The former was a bit stiff, even harsh, on moderate bumps in one test car equipped with 20-inch-diameter wheels and their stubby-sidewall tires. The tester with 18-inch wheels was smoother, but still delivered an unpleasantly choppy ride… [The] MKS lacks the firm, lively, well-controlled feel of an Infiniti, which Lincoln says will be a rival. Nor does it match the creamy feel of Lexuses, also potential competitors." Although Healey couldn't top Justin's "Sucko the Clown" description of the MKS' six-speed, the USA Today guy was similarly unimpressed with the cranky cog swapper. So… what then? "It has the right size, features and power. But MKS is not knockout gorgeous, and it lacks the sweet, lively integrity of the best luxury sedans." Ford doesn't have much time to sort-out the MKS' deficiencies. The Blue Oval Boys better hop to it. 

Whenever someone ridicules TTAC's GM Death Watch for cresting a particular episodic number, I ask them to imagine the count if I'd started writing when GM began its decline. For proper mind boggling, cast your mind back to 1946. After spending two years inside GM, management analyst Peter Drucker published "Concept of the Corporation." Although Drukcer's tome praised GM's infrastructure, Drucker suggested that the automaker should decentralize power to autonomous business units. Then GM Chairman Alfred P. Sloan's inability to grasp the implications of Drucker's recommendations marked the beginning of the end for what was once the world's most profitable business. It took more than half a century for GM's fundamental cultural weaknesses to drag it into today's ignominy. And the slouch towards Bethlehem was not inevitable. Or was it? "Management is doing things right; leadership is doing the right things." This GM's CEOs have not done for many, many years. And that's the truth.

"[Cutting-back on U.S. light truck production] shows that Toyota is just as fallible as anybody else,” said Joseph Phillippi, a principal of AutoTrends Consulting. “They’re human after all.” Well gee, who'd a thunk it? I guess former Detroit News cheerleader (now ace New York Times scribe) Bill Vlasic couldn't resist putting the boot in, as the Brits would say. To be fair, the article is extremely fair in its assessment of the relative impact of the SUV/pickup truck extinction on the Big 2.8 vs. Toyota. And we get another glimpse of what makes Toyota the Automaker in Front. “By using this downturn as an opportunity to develop team members and improve our operations, we hope to emerge even stronger,” claimed Jim Wiseman, ToMoCo NA's external affairs Veep (sounds sexier than it is). Happy talk? "They have piles of cash and are as flexible as any company in the industry,” said analyst Maryanne "Where's GM's Sense of Urgency?" Keller. “This is probably a good thing for Toyota because, in their history, they have shown that adversity is what makes them stronger.” Not to mention the fact that doing less badly than your competition is the same as doing better. 

If not for pencil-necked Oklahoma, Kansas would share a border with Texas. But the two states shared a laugh today, as the Kansas City Star told its readers about a couple of flat-footed Dallas cops who've been driving around with a gigantic stash of coke. At least technically, the Class A drug wasn't theirs. "An officer cleaning the car at a patrol station Wednesday discovered the nearly 50 pounds of cocaine hidden in hydraulically controlled compartments. 'These compartments have recently been more and more popular with drug operations,' said Deputy Chief Julian Bernal, commander of the Narcotics Division. Dallas police put the two-door, 2004 black Infiniti into police service May 7 after seizing it at a drug house, where they also found a 1999 Honda." And the Honda's important because…? "The Honda was sold at auction. Bernal said police planned to contact the person who bought the Honda to find out whether drugs are hidden in that car, too. They are also trying to find out who owned the cocaine they have been driving around." Sounds like a plan to me.

The S&P 100 is the most widely watched index of large-cap US stocks. It's a bellwether for the U.S. economy, a vital component of the Index of Leading Indicators. Reuters reports that the index's managers have punted GM, replacing it with Mastercard. "S&P did not in a statement explain why it dropped GM from the S&P 100." The fact that the automaker's share price has recently slid to 50-year lows, and the international automaker's market cap has fallen from $56b in 2000 to around $5.6b (which means GM NA has a negative net worth), might have had something to do with it. Informed speculation about an impending GM bankruptcy certainly came into play. And now all the index funds that buy the basket of S&P 100 stocks will have to sell their GM and buy Mastercard– no matter what the current price. The news should drag GM's stock price even lower. It's only a matter of time– and not much of it– before the DJIA (Dow Jones Industrial Average) will have to take a hard look at GM's inclusion. If/when, GM gets kicked off that listing, raising money to feed the automaker's cash conflagration will get a lot harder. Leaving federal loan guarantees as GM's only recourse to stave-off Chapter 11. All this before July's sales number and GM's first quarter results. Dark days ahead. 

If GM and Chrysler were healthy, they wouldn't have anything to deny, would they? But they do. And so they have. In so doing, GM CEO Rick Wagoner provided the perfect non sequitur. According to Bloomberg, "GM has no thoughts whatsoever'' of bankruptcy. Hang on; if you're not thinking about it how can you answer the question? And anyway, if Wagoner isn't thinking about bankruptcy, should he be? You know; the threat of bankruptcy? Or is this one of those quintessential GM fingers-in-the-ears "la-la-la-la-la" moments? Along the same lines, Wagoner declared "We don't have any plans to eliminate more brands." That's reassuring? Shouldn't GM have plans to eliminate brands? Especially if GM "has a lot of money for a company of its size" (i.e. one who's market cap is less than Mattel). Meanwhile, Automotive News [sub] has intercepted a letter from former ToMoCo Prez (and current Chrysler Prez) Jim Press and his best bud Steven Landry (executive vice president of North American sales) to ChryCo dealers. The missive assures store owners that the ailing American automaker isn't going Tango Uniform. "Speculation has surfaced recently in media coverage of analyst reports suggesting Chrysler might have liquidity issues down the road if the U.S. market does not pick up. Chrysler has communicated to the media that the suggestion of a possible bankruptcy situation is without merit." Without merit? As in untrue? False? Wrong? Parse-ably. 

There are three phases of life. 1. When you don't know any of the songs playing in the elevator. 2. When you know all the songs playing in the elevator. 3. When you don't know any of the songs playing in the elevator. I feel like I'm getting closer to phase three. Not because I've just celebrated my 49th birthday. Nor because of Muzak; it's been so long since I've been in an office lift they're showing the Elevator News Network for all I know. No, it's down to the fact that Justin had never heard of the word "cheesecake." It's an old-fashioned expression (sigh) referring to semi-pornographic pictures of attractive women (I daren't ask Justin about T and A). You may have noticed there's a lot of these sorts of pictures hereabouts, as of late. Frank made the decision to deploy garage wall pinups after contemplating our 4856th image of a Toyota Prius. I agreed because I'm largely heterosexual (so to speak), and what the Hell– it's not all about you. We realize this shift has rendered TTAC less cubicle-friendly. And so we've charged out boffins with creating a button to make TTAC a text-only site. Meanwhile, your thoughts?

Setting aside the fact that an indeterminate number people buy hybrids for reasons other than saving money (green props, emissions, etc.), what about Ye Olde Hybrid premium? Where are we on that score these days, what with $4 the new $1.50 down at the pump? NADAguides has done a little number crunching on that score. They reckon "only a handful of hybrid cars make financial sense for a consumer who buys a new car every five years." Warning that miles driven and local gas prices are significant variables, NADA conclude that the following gas – electric cars recoup their "extra" cost within the five-year time frame (presented in order of fastest recoupage to slowest): Toyota Camry Hybrid, Chevrolet Malibu Hybrid, Nissan Altima Hybrid, Toyota Prius, Honda Civic Hybrid, Cadillac Escalade Hybrid (just kidding). NADA's press release gives us a big ass chart of local gas prices and uses EPA stats and manufacturers' MSRP. But they don't make mention of the single largest expense of car ownership: depreciation. And here's a question: to what "gas equivalent" did they compare the Prius?

You'd think we were back in second grade, what with all this "not" stuff. New York Times Op Editorialist Roger Lowenstein joins celebrity stock picker (and former GM booster) Jim Cramer and Merrill Lynch analyst John Murphy in accepting GM's not impossible nightmare. In his attempt to discover "WHO shot GM?" Lowenstein passes rising gas prices, a lack of hyrbids and bad design and goes straight to… the United Auto Workers' (UAW) legacy costs. "None of G.M.’s management miscues was so damaging to its long-term fate as the rich pensions and health care that robbed General Motors of its financial flexibility and, ultimately, of its cash." Huh? Apparently, without paying all that money to the UAW GM could have "designed new cars or researched alternative fuels. Or it could have acquired half of Toyota." Or bought Saab! Or HUMMER! Or started Saturn! Oh wait… sorry. It's all about universal health care and highly relevant shit like that. "The sorry decline of General Motors has proved Reuther right: the government is the better provider of social insurance. Let industry worry about selling products." Sure. That's the right approach. NOT!