Every year, the California-based whack jobs at Strategic Vision announce their "Total Quality Index" (TQI) with some headline-grabbing conclusion. Each year, the media swallows it hook, line and sinker. Each year, we point out that Strategic Vision's methodology is from Planet Claire and their client roster indicates a greater conflict of interest that Gerald R. Ford's presidential pardon. This year we get "Ford vs. Toyota, The Battle for Total Quality Intensifies." Yes, “Ford is back, establishing its vehicle quality in the hearts and minds of its customers,” proclaims Alexander Edwards, president of Strategic Vision’s automotive division. Not to mention Mercury, whose Sable (what the Hell's a Sable?) scoops SV's best large car. And if that isn't enough to discredit these Bozos highly-paid market researchers, ALL the winners are Strategic Vision clients. (Still.) HOW they won is anyone's guess– unless you can envision a way to create a point system measuring "consumers’ motivational hierarchies, including the values that shape perceptions and capture the customers’ emotional responses and drive behavior." Yes, once again, we're ready for someone else to cut down Strategic Vision's "Tree of ValueCentered Knowledge." Please.

The Wall Street Journal [sub] has been busy reporting CEO Rick Wagoner's new new turnaround plan, which looks an awful lot like his last turnaround plan, which is based on the principle "Yes, you CAN cut your way to prosperity." Set for unveiling next Tuesday (June 3), "New restructuring actions could include the elimination of some slow-selling models. Mr. Wagoner also will unveil plans to boost revenue." For this you buy a subscription? Obviously not. At the bottom of the report, we get the money shot: "Some analysts, however, fear GM may be headed for rougher waters given its dwindling cash position. As of March 31, GM reported $24 billion, or $6 billion less than what was on hand September 31." Holy cash conflagration Batman! I make that a $1b per month cash burn. Do the math. Or hear this: "Mr. Gilbert [a fixed income analyst at Principal Global Investors] said that if GM doesn't figure out a solution, it may be headed down the same road as the airline industry, which saw several carriers file for bankruptcy protection in recent years. 'Liquidity is the one thing that always separated the two (industries)… If that goes away, the two will look a lot more similar.'"

"Despite GM's troubles, Mr. Fisher, a former Eastman Kodak Co. chairman, said the board supports Mr. Wagoner and believes GM has the 'best management team to get us through these difficult times,'" reports The Wall Street Journal [sub]. "He pointed to solid products and strong international growth as benchmarks of Mr. Wagoner's success." George Fisher retired as CEO of Eastman Kodak in 1999. From The New York Times on the eve of that auspicious occasion: "Q. There are those who view your tenure at Kodak as a terrible disappointment. Do you feel you've failed? A. Not at all. I remember telling Roberto it would take three years to get Kodak on track. He said it would take five, and O.K., it's taken closer to seven. But the fact is, I've accomplished everything I set out to do. I get angry when I get mail from people complaining about my performance, or when members of the press select the quotes they use to paint negative stories… Q. But you are losing $100 million a year in digital, and shareholders are clearly unimpressed. A. You call it losses, I call it investment." Back to the WSJ and GM: "Another GM board member, Kent Kresa, said in a phone conversation Tuesday night that GM 'management has a handle on the situation.'" Kresa was CEO of Northrop Grumman Corporation from 1990 to 2003. Kresa saved Northrop by merging it with Grumman, buying 15 other defense contractors and instituting ruthless cost-cutting. His faith in Wagoner's unspecified turnaround plan reflects Kresa's seat-of-the-pants, high stakes poker management style, and faith in political influence peddling. So now you know.   

What's the downside? Seems no one at Honda asked that question when the automaker decided to hire a team of 19 skydivers to form the word "Honda" in mid-air. In three minutes and 20 seconds. Live. On British national TV. The spot falls under (so to speak) Honda's new ad campaign: "If it's difficult, it's worth doing." If something goes seriously wrong, the Honda ad will test the limits of another, showbiz-oriented strapline "There's no such thing as bad publicity." The Guardian makes no mention of the ad's central lure– the possibility of death. It does, however, reports that Honda's already tested the concept. (So that's alright, then.) "The stunt is a means of gaining publicity for Honda's new multi-million pound ad campaign, which features 45 skydivers promoting the Honda Accord by creating a series of shapes over the Mojave desert to reflect new features on the car." i-VTEC® this! So why risk risking lives to do it live? ""We wanted to create something unmissable and what better way to produce something 'must see' than to stage the first live ad event on TV," Channel 4's sales director, Andy Barnes revealed. "It's about creating talkability on a big scale, managing the risk and being seen as pioneers for it." Let's hope "managing the risk" doesn't turn into paying off someone's widow. 

“Rich people don’t care [about high gas prices].” Bob Lutz’ statement– made during the launch of GM’s new SUV’s in August 2005– encapsulates the automaker’s history of arrogance, ignorance and self-delusion. Then again, what else could GM’s Car Czar have said? Whether or not GM should have seen the gas crunch coming, the die was cast. Now, as gas prices crest $4 a gallon, as Delphi and GMAC teeter on the abyss, as GM’s stock price hits a historic low, GM’s slide into Chapter 11 is beginning to assume the mantle of inevitability. And why not? There is no Plan B.

There is a moral element to Detroit's woes, and it's not working in Motown's favor. As Ford, Chrysler and GM's decades-long mismanagement lead the giants to a disastrous denouement, the "buy American" voices— which could help the automakers secure government loans/guarantees– are growing fainter by the day. The fact that none of these American automakers have given a moment's thought to off-shoring parts and vehicle manufacturing does them no favors in this department. But an even more dangerous narrative is trickling through the media gestalt: Detroit dragged their feet on fuel economy and refused to heed the warnings provided by the first oil price shock. In other words, Detroit made their own damn bed and they should get ready to lie in it. Joseph Szczesny's piece in The Oakland Press represents the thinking, and no one gets out alive. "The industry's executives basically ignored fundamental warning signs and hung on to outdated prejudices and assumptions while the world was changing around them. The executives around Detroit have been eager to pass the blame for their current plight on expensive labor contracts, hostile regulators and an indifferent press. The fact is on the critical issues relating to energy policy and fuel economy now bedeviling the automakers the UAW had basically given up and followed the lead of the industry's top management." The thing of it is, Szczesny used to be a GM booster. Not anymore. 

[TTAC has heard of new GM ads touting the company's contribution to the U.S. economy. Has anyone seen one?] 

Autocar magazine has suddenly woken-up to the threat to UK jobs posed by the Government's new CO2-based car taxes. And boy are they miffed! After listing the auto industry's contribution to the island nation's economy– 800k employees, £200b turnover– Julian Rendell lets 'em have it with half a barrel: "And yet the government's policies could be putting that business, and those jobs, in increasing jeopardy." [emphasis added]. Ya think? CO2- belching Bentley, Land Rover, Jaguar, Aston Martin and Lotus all call Britain home. Instead of bringing out the big guns to attack the anti-car jihad– union leaders, car makers' reps, opposition politicians, analysts– Autocar picks up the cudgel on behalf of the working stiff. "Those who govern our country are making cars prohibitively costly to buy and to own, and by doing so they've giving the ordinary people who make, sell, service and repair those vehicles real concern for their jobs and their futures." That said, the guys on the line really know their onions. “I feel the government’s policies are clearly anti-car,” said Craig Caves, line manager at Ford of Britain’s Dagenham Diesel Centre. “On a daily basis they are producing an anti-car mentality that can only threaten jobs in the car industry. And it’s not just us at risk; it’s all the people supplying us and the people local to the plant.” News flash: the time to bring-up this issue was five years ago. At least. 

Is great to be leader of glorious Russian Federation. Of course, we can always be more glorious. And glory be to the Russian car industry. Make world's greatest automobiles for world's greatest people. Is natural we want to build cars inside Russian Federation, to help our economy grow and prosper, like garden. So we are placing new tariffs on used cars more than five years old. Is simple economics. Russian-made cars are only 40 percent of the market, including foreign brands. This is all because the Russian car industry has receded from its position quite seriously. I am thinking about 80 percent of cars sold in Russia should be made in our country. New import tariffs rates will increase demand for clean new cars. Pravda, which means truth, says "Russian car manufacturers may not derive profit from it at all." But who knows what they mean and that is before I make phone call. Until then, I remind Russia's foreign partners in auto industry of old proverb: "What's mine is mine and what's yours is mine." Dasvidanya.

Like fungus? But seriously folks, Honda's Chief Designer felt compelled to both explain (it wazzunt me) and defend (try it, you'll like it) the new Pilot. Wardsauto.com cornered Dave Marek to extract the mea culpa. "The (controversial) grille was a case of taking something that was on something else… and kind of massaging it to fit,” he kind of asserts. “On the mockup, (it) looks good. When you actually manufacture it, oops! That’s actually what happened. It’s hard to foresee. (But) I think when (the ’09) is out on the road, people will appreciate it.” Why is this man prevaricating? The new Honda Pilot is a hit. Perhaps Marek is embarked on some kind of bizarre career seppuku. It sure sounds that way. "That kind of success makes it easier for designers to be heard, Marek says. “I can stand up at a board of directors meeting and say, ‘Are you people stupid?’ And nobody goes, ‘Get him out of here.’ They’ll say, ‘What are we doing wrong?’" Either that or "you're fired." 

Automotive News [AN, sub] reveals that ChryCo's been running the "Chrysler Multi-Million Dollar Mystery Shop Challenge" since May 12 (way to stay on top of a story). From that fabled date until the end of the year, "the automaker will conduct more than 20,000 mystery shopper visits, roughly one for every sales consultant at every dealership." Salespeople who pass the test with "flying colors" are entered into a draw for $1k. Woo-hoo! Only AN forgot to ask how many C-notes will be awarded. Anyway, is Chrysler checking the honesty and integrity of their dealers' sales staff? You know: making sure there's no bullying or misrepresentation? Are they Hell. "Chrysler hopes the program will get the sales force focused on the attributes of its vehicles… Chrysler claims the program can be a motivational tool and can focus its sales force on promoting the virtues of its vehicles, rather than deals." As churlish as this sounds, is that really a good idea?

As we've chronicled here umpteen times, dozens of automotive websites and publications pull their punches on GM product reviews to maintain good relations (i.e. ad bucks, press cars and junkets) with The General. It's an understandable– if entirely lamentable– phenomena. But who'd a thunk the non-automotive blogosphere could be bought so easily? Actually, us. You may recall that Justin and I infiltrated a roomful of non-car GM junketeers– including a manic mommy from manicmommies.com. According to Automotive News [AN, sub], GM's "director of global communications technology" is still hard at it. Christopher Barger's got five full-time employees working on with "hundreds" of bloggers. Barger won't reveal his budget for blogging black bag ops, but justifies it easily. "Readers are paying more attention to individual bloggers, frankly, than they are to us as a source of credible information." Hey Chris, got that right. And while we await Barger to send us 800 words, we'd like to point out that Automotive News and GM have neglected to mention gaywheels.com, a major beneficiary of The General's largess. Surely GM and AN wouldn't want the gay community to think they were hiding or purposely downplaying their relationship, would they? 

On Friday, after GM detailed the financial damage caused by the American Axle strike and union shutdowns at two of its plants, the American automaker's stock price slid to $17.38– it's lowest level since February 1982. Once again, GM saved bad news for the end of the week; the stock market couldn't fully react to the revelation. As the markets are closed for Memorial Day, it'll be Tuesday before investors [literally] take stock of the situation. They'll also take into account GM's busted accounts— a deficiency that caused numerous financial restatements, triggered an SEC investigation in October 2005, caused the ouster of CFO John Devine in December 2005, and forced the "resignation" of controller Paul W. Schmidt and chief accounting officer Peter R. Bible in May 2006. Meanwhile, in the here and now, the U.S. new car market is moribund (to say the least) and there's little prospect of immediate recovery. GM's high-profit trucks and SUVs are dead in the water. Suppliers are up against the wall, with a "run on the bank" scenario (cash on the nail, please) looming large, The stock market is waking-up to the perfect storm we've been predicting for months if not years.   

GM's annual report's out (just in time for the weekend!) and it's a shocker. The General's CEO, the company's former CFO, has admitted that the automaker's accounts are, how do we put this gently… unreliable. Here's the text: "Material weaknesses previously identified as of December 31, 2006 that continue to exist as of December 31, 2007: 1. Controls over the period-end financial reporting process were not effective. This has resulted in a significant number and magnitude of out-of-period adjustments to our consolidated financial statements and in previously reported restatements. Specifically, controls were not effective to ensure that significant non-routine transactions, accounting estimates, and other adjustments were appropriately reviewed, analyzed, and monitored by competent accounting staff on a timely basis. Additionally, some of the adjustments that have been recorded relate to account reconciliations not being performed effectively… 2. Controls to ensure our consolidated financial statements comply with IRS No, 109, Accounting for Income Taxes were not effective… 3. Controls over the accounting for employee benefit arrangements were not effective. We lacked sufficient control procedures as well as adequate involvement of technical accounting resources to ensure that employee benefit arrangements were accounted for properly." It's hard to grasp the full implications of this revelation. If GM severely over-reported its liquidity, the situation could be dire. Full Death Watch on Monday. [thanks to Buickman for the heads-up]

You'd think that Exxon shareholders would be pretty damn happy about rising gas prices (in terms of the company's alt. fuel investments) and the fact that the energy giant booked $11.7b worth of profits in the first financial quarter of the year. That should go double for the Rockefeller family, whose unimaginable lifestyle is supported by their Exxon stock. But nooooooooo. The New York Times reports that the Rockefeller family have thrown their weight behind a "shareholder rebellion" aimed at pushing Exxon further and faster towards an alt fuel future. "The resolutions ask Exxon to take the threat of global warming more seriously and look for alternatives to spewing [sic] greenhouse gases into the air. One resolution would urge the company to study the impact of global warming on poor countries, another would encourage Exxon to reduce its emissions and a third would encourage it to do more research on renewable energy sources like solar panels and wind turbines." Yes, “Exxon Mobil needs to reconnect with the forward-looking and entrepreneurial vision of my great-grandfather,” Neva Rockefeller Goodwin announced in a statement. “The truth is that Exxon Mobil is profiting in the short term from investments and decisions made many years ago, and by focusing on a narrow path that ignores the rapidly shifting energy landscape around the world." 

The Dunn County News reports that ethanol boosters have re-energized their alliance with the American Lung Association. "From food to fuel, corn serves many purposes these days," scribe Bruce Dybvik writes. "When processed as ethanol and added to our gasoline, it seems to benefit our breathing, too. According to Bob Moffitt, communications director of the American Lung Association, 'Every flex-fuel vehicle that uses E85 instead of gasoline for a year saves four tons of air pollutants from going into the air, including a lot of greenhouse gasses. Here in Wisconsin, one of the leading sources of air pollution is tail pipe emissions.'" The reduced greenhouse gas claim is the most obvious obfuscation, as E85 gets less mpg than normal gas. But the idea that E85 is "cleaner" than garden-variety (or not) unleaded needs some serious debunking. In 2007, Environmental Science & Technology [via Scientific American] offered one such an analysis by Stanford University's Professor of Civil and Environmental Engineering. "Due to its ozone effects, future E85 may be a greater overall public health risk than gasoline," Mark Jacobson's study stated. "It can be concluded with confidence only that E85 is unlikely to improve air quality over future gasoline vehicles."