In his raucous yet rambling history of the American west, author Hampton Sides reveals the surprising fact that the Confederate Army didn't lose their Western campaign in glorious battle. According to Blood and Thunder, they lost their war in Apache Canyon, when a Union commander named John Milton Chivington stumbled upon his rival's supply train. Chivington's men rapelled down the canyon walls and overcame the camp's defenders. He then destroyed 80 wagons' worth of supplies and some 600 horses and mules. And that was that. It was only a matter of time before the largely Texan force limped home, starving, sick, beaten. Flash forward to Detroit. Experts say that Chrysler's Plastech debacle– a dispute which threatened to sink the entire company– is only the tip of the proverbial iceberg. As many as two dozen key automotive suppliers could file for bankruptcy this year. Their demise is down to the domestics' belief that their competitive future depends on outsourcing parts-making to low-cost foreign countries. Maybe so. But only a fool abandons (or lightly guards) his vital supplies before securing a new supply. Think Detroit's ready for a U.S. supplier meltdown? Obviously not. More to the point, isn't there anyone in Detroit who knows how to fight?  

Man, we are so going to the National Automobile Dealers Association convention next year; you know, if they let us in. Where else would you hear Ford Prez Mark "Tool Time" Fields say "Mercury has a place in our brand portfolio" and then refuse to assure the brand's dealers that Ford won't kill it? In fact, the AP [via MLive] reports that "Ford executives" told "a group of dealers that "new Mercury products are coming." Such as…? A Mariner hybrid? A Mercury version of the Edge? [crickets chirping] Let's try that again. "When asked what he would tell dealers who fear the brand could be discontinued, Jim Farley, Ford's group vice president for marketing, said they should look at the new products." Such as…? [cue: tumbleweeds] "They wouldn't give us any definite answers," revealed Steve Downing, owner of a Lincoln-Mercury dealership in Yuba City, Calif. "Obviously the future's with Lincoln." Too true Steve, but don't worry. As Fields says, it's all part of a "process." ""Any good business on a continuous basis looks at their portfolio. Any good business does that, not just automotive, and that's part of our process."

“It’s a New Day.” Unless you’re terminally ill or the guest of a terrorist cell, this observation won’t come as much of a surprise or, in itself, cause much delight. And yet that’s the tagline for the [now] combined Chrysler, Dodge and Jeep brands. In an explanatory TV ad, an animated child tells viewers that the American automaker will [now] listen to YOU and build cars the cars YOU want. The ad is an excellent example of what Adolph Hitler called The Big Lie: a falsehood so "colossal" that no one would believe that someone "could have the impudence to distort the truth so infamously". To wit: if any single automaker ISN’T building the cars YOU want, it’s Chrysler.

According to Automotive News [AN, sub], GM's top quality executive is touring the country telling dealers that a large percentage of consumer dissatisfaction with the quality of GM products comes down to slack dealer prep. No really. Jaime Hresko said that "40 percent of the problems that show up on GM quality reports from sources such as J.D. Power and Associates are related to vehicle controls and settings — not manufacturing issues that stem from vehicle design or assembly." Hresko is asking GM retailers to complete a thorough pre-delivery inspection of "issues that routinely irritate customers and may poison satisfaction reports." We're talking "memory and personalization features," including seat and mirror settings, clocks, radio stations, computer and navigation system settings." Hresko's exhortation is not without reason. As TTAC has pointed out before, J.D. Power's Initial Quality Survey (to which Hresko was alluding) is inherently flawed, measuring little more than consumer expectations and doing so over a ridiculously short time period (90 days). Still, maybe GM's top quality guy should be concentrating more on his side of the ledger. I mean, any study that names the Pontiac Grand Prix the best anything (Best Large Car) can't be all bad– you know, as far as GM's concerned. 

Over the last year or so, GM's spinmeisters have relied on fleet sales reduction as their number one excuse for declining sales and market share. Not to coin a phrase, the spin stops here. Speaking at the National Automobile Dealers Association (NADA) conference in Mean Old "Frisco, GM's Marketing Maven Mark LaNeve said he "does not foresee a further reduction in GM’s fleet sales." Ward's pegs GM's current fleet sales at "fewer than 600,000 units," which LaNeve defended as "very profitable now." Apparently, that's because GM lowered fleet volumes AND raised prices. LaNeve told the assembled dealers that the process was a bitch. "This was a tough conversation. We had to go to some of our best customers – these guys buy hundreds of thousands of vehicles at a time – and say, ‘we’re raising prices and you’ll probably get less.’" Note the word "probably." Wards reports "when it comes to hot-selling products, such as the redesigned ’08 Chevrolet Malibu, if retail sales are high enough, rental companies might not get the vehicle." Note the word "might." And also note the fact that TTAC readers have already reported seeing the new 'Bu on rental lots. In fact, I'm not sure I believe any of this.  

While GM CEO Rick Wagoner is busy talking-up his plan to consolidate Saab, Hummer and Cadillac dealers into some sort of weird ass "luxury car" salon, Auto Motors und Sport [via Reuters] reports that Saab sales are slouching towards Bethlehem. Saab's head honcho, Jan-Ake Jonsson, told the German buff book that the erstwhile Swedish brand sold just 125k cars last year. That's down eight thousand cars from the year previous, and 35k less than Saab's recently revised internal goals. (In June, GM European Prez Carl-Peter Forster predicted 160k '07 Saab sales, down 10k from the previous estimate.) So, uh, where does that leave Saab's plans these days? "It is our target to sell 150,000 to 200,000 units per year," Jonsson told Auto Motor und Sport. "But in order to reach such annual sales we need the new models." Not if they're like the old new models…

The National Automobile Dealers Association (NADA) shindig in The City by the Bay is all abuzz about domestic manufacturers' "dealer consolidation." As we've been saying for the last two eons, The Big 2.8's obese dealer network (GM still has over 6k franchisees) is a millstone around their collective neck, forcing them to spread their corporate resources paper thin. Now that The Big 2.8 are supposedly addressing the problem by "combining sales channels" and "helping dealers merge," it should be noted that the vast majority of the "credit" for lowered domestic dealership counts goes to… bankruptcy. The simple truth is that hundreds and hundreds of The Big 2.8's dealers are failing, closing and disappearing. Meanwhile, what "carrot" can the automakers offer for consolidation? Cash? Hot models? Er, no. Ah, but Chrysler's found a stick! Automotive News [AN, sub] reveals the hidden hand behind "project Genesis:" "Chrysler LLC plans to prune its product lineup to the point that only dealers carrying all three of its brands — Chrysler, Dodge and Jeep — will have a full vehicle line." Ex-Toyota Prez, current Chrysler Veep Jim Press outlined the threat. "If (dealer) consolidation doesn't occur before the product goes away, it will be more difficult for dealers to get what they want." Is that a threat? Is that legal? Inquiring minds want to know.

It's no secret that The Big 2.8 have been beating-up on their suppliers for decades, banking profits on the backs of their parts making "partners" by squeezing them for every possible penny (often at the cost of quality). Not to put too fine a point on it, relations between parts providers and American automakers are positively poisonous. So why is Reuters taking the automakers' side in their analysis of supplier – manufacturer relations post-Chrysler – Plastech blow-up? "And the stand-off between the companies will not be the last either, as U.S. automakers — looking to close plants, slash jobs and streamline operations to return to profits — lose patience with financially stressed suppliers." So how does scribe Ben Klayman reckon the suppliers became "stressed" in the first place? Anyway, "that hard line certainly caught suppliers' attention." Yes, but not in the way Klayman suggests. Suppliers are fed-up with Auburn Hill's late payments and now, bully-boy tactics. If they think Chrysler's pulling-out or going under, why wouldn't they get tough? Chrysler could soon learn that Hell hath no fury like a supplier scorned. 

The Wall Street Journal reports that Toyota's captive finance company is increasing the number of 84-month auto loans on its books. "These loans, which carry slightly higher rates than 72-month deals, have risen to represent 4% of all cars Toyota Financial Services lends money on." (This they call writing?) The Journal puts some numbers to that "slightly higher" aside (from 6.9% to 7.59% for 84-month loans, compared with 5.85% to 6.84% for 72-month financing) and ascribes the move to a general desire by automakers to avoid piling incentives on their new metal during the current sales slowdown. Although GM may face blowback for its "anyone with a pulse" zero percent financing deals, Toyota Financial Services is also on the hook for billions. An unnamed ToMoCo spokesmouth told the WSJ that her employer writes loans for about three-quarters of the cars financed at U.S. Toyota dealers, accounting for about 50 percent of total sales. She claimed the seven-year loans are given only to customers with top credit. Yes, well, is this the start of a trend? GMAC Financial Services says 84-month loans constitute a tiny portion of their car biz, and Ford Motor Co.'s credit arm says it "isn't aggressively offering them." "We don't like these loans," Ford Motor Credit Chief Executive Michael Bannister told the Journal. We shall see…

Automotive News [AN, sub] reports that Chrysler is stepping-up– as in scrapping and starting again– its plans to trim products and dealers. Much to Hyundai's delight, the new new plan is called Project Genesis. And in the beginning, there were three brands, 28 models and 3600 dealers. And lo, Chrysler decided to place all three brands (Dodge, Chrysler and Jeep) unto one dealership and, uh, "eliminate duplicate models on the same platform." Oh, and also "develop new ones in segments where it doesn't have current entries." To get the dealers on board (toss them overboard?) Chrysler is sending out its emissaries. "Business teams will descend [from on high] on those cities to help dealers arrange to buy or sell franchises to make the consolidation happen." And they means business. "Chrysler will then hold individual meetings with dealers and review whether they want to be a willing buyer or willing seller." On the other hand… "Project Genesis will not be a 'push program,' and there will be no deadlines or timetables. Nor will the company open the Cerberus bank account to dealers, Press said." So, how will Chrysler coerce dealers to buddy-up or die? Hell if I know.

You know, we give Autoblog a lot of grief for being the auto industry's bitch. And deservedly so. But every now and then the website of record gets a sudden rush of testosterone that makes us proud to share the autoblogosphere. Today's Detroit Free Press carries a boilerplate auto show story involving one former Toyota Prez (Jim Press) and one rear wheel-drive muscle car (Dodge Challenger SRT8). Price, waiting list, Mustang throwdown ("We'd rather run like a thoroughbred than ride like a pony"), yada yada yada. And then Chrysler Vice Chairman Jim Press has his say. And then Autoblog's Damon Lavrinc takes the Chrysler exec to the woodshed. "Press expounded on the Challenger's virtues, saying that the SRT8 has a higher top speed (170 mph) than BMW's M5. Kind of a misnomer considering that the M5's speed limiter keeps the BMW sedan below 155 mph – unleashed, it has the potential of doing 205 mph. The Freep also quoted Press as saying that the Challenger has more torque than the Porsche 911 Turbo. Ummm… no. The 6.1-liter Hemi V8 produces 420 lb.-ft. of twist compared to the 911 Turbo's 460 lb.-ft….'When you sit inside, it makes you feel younger and richer than you are.' Younger? Maybe. Richer? Not quite Mr. Press. We've seen the interior and it's hardly what you'd call luxurious, let alone exciting." You go boy!

One of the nice things about having a tightly-focused brand– complete with an explanatory tagline– is that you know when to say "no." Pontiac: We Build Excitement. Minivan? No. Crappy coupe. Uh-uh. Mercedes: Engineered Like No Other Car in the World. Cheap shit downmarket decontented sedan? Nope. Crappy coupe. Nein! Cadillac: The Standard of the World. Rebadged Chevy? Yeah right. Cheap shit front wheel-drive sedan? I don't think so. Of course, we all know that Pontiac, Mercedes and Cadillac all ignored Nancy Reagan's admonition and built cars that made a mockery of their brand remit. Less well recognized: all three automakers chose to change their taglines rather than face-up to their mistakes and return to their roots. Look at the struggling car companies and faltering  brands– Ford, Chrysler, Lincoln, Mercury, Saturn, Pontiac, VW, Buick, etc.– and there's one thing that unites them all: they don't have a clue what they should be building. Until they fix their branding, they will never fix their business. Not building bad products is just as important as building good ones.

BusinessWeek's Dee-Ann Durban had the pleasure of attending the Chicago auto show to get a feel for how the suits are feeling about the future. And the answer is… great! "We're beginning to see, after six quarters of declines, the beginnings of some pent-up demand," opined GMNA Prez Troy Clarke. "You could make a case that the second half of the year could be significantly better." Marketing Mark LaNeve agrees with his co-worker's "Annie" analysis. "We really believe the industry's going to be OK this year," LaNeve said. "We've had a fairly weak car market for the better part of two years. Economic weakness is being experienced in other places right now. We've already been in it." Ford's President de las Americas, Mark "Tool Time" Fields, was also optimistic, in a plausible deniability sort of way: "We do see opportunity in the second half." While you can easily file all this spinnery under "What else are they going to say?" one could make a case that when the going gets tough, Pollyanna should go away. Sense of urgency. That sort of thing. 

We repeat: conflict of interest renders Intellichoice's data inherently suspect. So, Bloomberg [via Boston.com] reports that "General Motors Corp., the biggest US automaker, gained ground on Toyota Motor Corp. in an annual survey of ownership costs including measures such as sticker price and resale value. GM led in three vehicle categories, up from one last year, while Toyota again won four of the eight total awards." While we're disappointed that Bloomberg takes Intellichoice's choices at face value, their cheerleading conclusion is especially galling (to this gall bladder-less cynic). "The results lend credence to GM's goal of improving quality and boosting resale values by curbing incentive spending and sales to rental-car companies." This despite the fact that the Corvette was the only GM passenger car to receive a nod. Which didn't stop Intellichoice's spinmeister from bolstering Bloomberg's BS. "Word is starting to get out that if you buy a Chevy, you're not destined for troubles the way you were 10 years ago." Here are the full "results."

Just four days after Plastech's parts embargo shut down Chrysler factories, just eight days before the two companies' interim agreement is set to expire, Chrysler's CEO is deploying the same sort of charm offensive that made him so popular at Home Depot. "This was not hard-ball tactics, it was a solid business practice," Nardelli told reporters at the Chicago Auto Show. "We never meant to create an adversarial relationship with Plastech or any other suppliers." In other words, hey, it's just business. "We have to stay competitive. Our customers expect that. Obviously if [Plastech's] not financially sound, we certainly aren't in the business of subsidizing. No hard feelings, no animosity, just solid business practices." No subsidizing eh? The Detroit Free Press reports that Chrysler resolved the Plastech missile crisis by agreeing to pay some its bills "early;" an undisclosed portion of a $23.4m early payment cash infusion. It's a dangerous precedent that could consume Chrysler's cash pile. Meanwhile, Nardelli says Chrysler will continue to remove its parts contracts from Plastech. Somebody send that man a copy of "How to Win Friends and Influence People," STAT.