Bloomberg is quoting “two people familiar with the plan” (now it’s three) that Toyota’s pulling the plug on their joint venture with Old GM. “The company will negotiate the timing of the closing with Motors Liquidation Co., an entity responsible for the disposal of the assets GM shed in bankruptcy, said the people yesterday. They declined to be identified because the information wasn’t public.” But but but . . . it IS public. You know; now. Anyway, three days ago, ToMoCo was angling for government “assistance” and union “flexibility,” telling the world that it hadn’t made a decision on whether or not to terminate the project once and for all. Toyota’s North American chief executive Yoshimi Inaba said the decision “depended on possible aid from California lawmakers, labor contracts for the factory’s union workers that expire in August and NUMMI’s financial viability.” As Toyota is not known for, uh, lying, I reckon the jury is still out.
Back in roaring 20s (or thereabouts), TTAC highlighted American automakers’ tendency to use fleet sales to keep expensive factories running. The practice eroded vehicle quality (why bother making better fleet fodder?), eroded margins (a little profit on a lot is better than nothing!) and corroded brand equity (badge it up and send it out!). As The Big Three became The Big 2.8, as GM headed for bankruptcy, we gave the automakers grief for claiming they were abandoning fleet sales to address these issues when, in fact, the fleets were abandoning them. Point of clarification: the “look at us we’re so responsible” BS was a bad thing, even though fleet reductions are a good thing—provided the automakers switch to retail-competitive products, meaningful brands and, thus, larger margins. Which hasn’t happened. And the domestics’ fleet sales continue to disappear. In other words, whichever way you look at the fact that Detroit’s share of fleet sales has slipped from 80 percent to 48.4 percent, they lose.
Very funny, guys. We get it. The Truth About Cars takes you to task for your shoddy “investigative” report into the National Highway Traffic Safety Administration’s (NHTSA). You respond with an editorial called “The Truth About Cars and Cellphones.” Inside joke or not, we stand by our condemnation. First, conflating cell phone use with other distractions—excoriating drivers who “juggle hot coffee and a Mc-whatever or attend to personal grooming in the rearview mirror”—is both lazy AND stupid. Second, repeating your dubious charges—that the NHTSA bent to political pressure instead of faithfully discharging its duties—does not make them so. And third, semantics are the second-to-last refuge of a scoundrel. To wit:
Jon Lauckner, New GM’s Vice President of Global Program Management, picked up the FastLane webchat-a-phone and confirmed that he can’t confirm a final price for its tire-squawking (true story!) Hail Mary hybrid. This despite the fact that the Volt—or at least a small squad of hand-built prototypes—is due at the Chevy showroom—or at least down at the steps of Congress for the next ’round of bailout hearings—by the end of 2010. “Hi Dan,” Lauckner says, greeting the e-interrogator daring GM to whip out its sticker. “We typically do not lock in on pricing until about 3-6 months prior to start of production. The reason is primarily so we have an opportunity to take a look at the market, competitors and other factors. So stay tuned.” So to speak, ’cause that issue ain’t sorted out neither . . .
Huzzahs will greet Ford’s execs this morning, as The Blue Oval Boyz didn’t lose as much as they could have, and didn’t burn as much of their cash pile as they could have. More specifically, the DOE loan-taking American automaker reported a $424 million pre-tax operating loss on net income of $2.3 billion. (“Special items” created a net gain of $2.8 billion, including a $3.4 billion gain via debt-reduction.) The automaker ended the second quarter with “Automotive gross cash” of $21 billion. That means Ford’s “operating-related cash outflow” (i.e., cash burn) was $1 billion. Before the results, Ford CFO Lewis Booth claimed Ford was “certainly confident of getting through this year” with sufficient cash. True dat. Meanwhile, business sucks: Ford’s second quarter revenues clocked-in at $27.2 billion, down $11 billion from the same period a year ago. [Ford financials here.]
It’s all change at New GM—in the sense that the same old management is shuffling the same old players to re-consolidate their power within the post-Chapter-11 automaker’s moribund corporate culture. To wit: Automotive News [AN, sub] reports that New GM’s old North American Design Chief, Bryan Nesbitt, has been named New GM’s chief of Cadillac. “Chief.” I like that! As AN points out, Nesbitt penned the PT Cruiser for Chrysler—before jumping ship from one bankruptcy-bound American automaker for another. Again, Nesbitt is now, effectively, Cadillac’s brand manager; replacing “interim” Cadillac general managers Steve Hill and Steve Shannon, who will be rebadged and reassigned.
“Marchionne said he had installed a strong management team at Chrysler, the integration process was under way, and Fiat had already turned over a small-car platform to the Auburn Hills automaker.” That’s one small step for a platform, one giant leap for mankind.
I’m working on a piece entitled “Five Reasons Why Car Buyers Will Avoid the Cash for Clunkers Program Like the Plague.” Sneak peak: people trust car dealers about as far as they can throw an M1 Abrams tank. I know that several of our Best and Brightest are living la vida locomota by selling cars to suspecting punters. But I can honestly say that I have never met an honest car salesman face-to-face. Charming? Yes. Knowledgeable? Absolutely. But every last man Jack of them oozed obfuscation. The best of the breed, who shall remain nameless, avoids issuing outright lies with a simple yet effective technique: he ignores any question that requires a negative reply. Seriously. He says nothing. Unlike Mr. Piven, whose latest cinematic effort seems carefully designed to lower public opinion of a profession that couldn’t go any lower (both the opinion and the profession itself). But truth is sometimes stranger than fiction. Have you ever met an honest car salesman? And if you have, are you sure he wasn’t playing you for a fool?
There’s no doubt about it: the automotive landscape is changing. Carmakers around the globe are embracing electric propulsion, whether the volts are generated by a gasoline motor, a fuel cell, a distant power plant or a combination thereof. New companies seem to be springing up overnight to take advantage of the government’s desire (and money) to wean motorists from their petrochemical “addiction.” While everyone is rushing to produce politically-correct powerplants, one fundamental question that remains largely unexamined: from where will manufacturers secure the raw materials needed to mass produce this new technology?
The National Highway Traffic Safety Administration (NHTSA) woke up to a New York Times hatchet job. “In 2003, researchers at a federal agency proposed a long-term study of 10,000 drivers to assess the safety risk posed by cellphone use behind the wheel,” the NYT begins, without specifying who, what, when, where or how. But we do get a general sort of why: “They sought the study based on evidence that such multitasking was a serious and growing threat on America’s roadways.” And then, da da DA! “But such an ambitious study never happened. And the researchers’ agency, the National Highway Traffic Safety Administration, decided not to make public hundreds of pages of research and warnings about the use of phones by drivers — in part, officials say, because of concerns about angering Congress.” Dive! Dive! Dive!
Old GM’s marketing maven is New GM Sales and Service Supremo. Of course, Mark LaNeve held those latter two responsibilities before GM nosedived into bankruptcy. In fact, you could say that LaNeve’s administration of the sales and service elements of his tripartite position helped push GM’s corporate yoke into its maximum forward position. (I couldn’t possibly comment.) LaNeve should take some comfort in the fact that A) he still has a job, despite CEO Fritz Henderson’s dark hints about a sudden shiv in the shower; B) LaNeve still has a high paying job; C) his marketing remit has been filled by Bob Lutz, the only man on planet earth capable of making GM’s taxpayer-fronting taskmasters wish they’d stuck with LaNeve; and D) LaNeve gets a new business card! Automotive News [AN, sub]: “A GM spokesman said an official title remains to be created.” Suggestion box below. Meanwhile . . .
Carmakers build cars. The Truth About Cars (TTAC) reviews cars. What’s the problem with that? Any car company that takes account of TTAC’s no-holds-barred reviews is better positioned to appreciate their strengths and learn from their mistakes. To grow, develop, improve, compete and thrive. And yet, the list of automakers that refuse us access to their press cars is, shall we say, comprehensive. As of today, I’m launching a campaign to change that, to get the latest vehicles into the hands of TTAC’s reviewers. Not by altering this website’s call-it-like-we-see-it remit (heaven forfend), but by appealing to the automakers’ sense of honesty, integrity and fair play—and bludgeoning them with our site stats (1m+ unique visits per month, over 2m page views, top Google rankings).
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