GM has released its press release releasing [both] remaining fans of the Pontiac brand from the suspense surrounding its untimely (as in late) demise. “As part of the revised Viability Plan and the need to move faster and further, GM in the U.S. will focus its resources on four core brands, Chevrolet, Cadillac, Buick and GMC. The Pontiac brand will be phased out by the end of 2010. GM will offer a total of 34 nameplates in 2010, a reduction of 29 percent from 48 nameplates in 2008, reflecting both the reduction in brands and continued emphasis on fewer and stronger entries. This four-brand strategy will enable GM to better focus its new product development programs and provide more competitive levels of market support.” Buick? “The revised plan moves up the resolution of Saab, Saturn, and Hummer to the end of 2009, at the latest.” GM CEO Fritz Henderson put a brave face on the news, ’cause that’s who he is and what he does.
Well, they would, wouldn’t they? Makes sense. Why be caught flat-footed when the inevitable occurs? What makes less sense is that this story, hailing from our good friends over at Automotive News [AN, sub], doesn’t mention Chrysler or GM until the eighth paragraph, and then only in passing. And not before the scribes take a swipe at the Japanese automaker for abandoning The Toyota Way: “The moves violate Toyota’s vaunted ‘just in time’ production philosophy,” AN writes. “which views warehousing as a symbol of muda, or waste and inefficiency.” But hey it’s muda out there!
“The UAW said it reached a deal with Fiat and the U.S. government.” Oops! I forgot the word “also”. I wonder how that happened. Because everyone knows Chrysler’s management is large and in charge, despite the fact that its existence depends entirely on the largesse of the American taxpayer and the success of a cockamamie scheme hatched by a struggling Italian automaker and an unelected quango known as The Presidential Task Force on Automobiles. The Detroit News provides the details of the agreement, which show that the UAW—wait . . . No they don’t. Motown’s hometown paper doesn’t provide any details of the union – Chrysler – Fiat – PTFOA agreement. All we get is this: “The settlement agreement, subject to ratification by UAW members at Chrysler, includes a revision of the 2007 health care deal, and members must approve the deal by Wednesday.” At best, we can assume some sort of health care obligation for equity swap involved. At worst, Uncle Sam will guarantee the union’s health care provisions, regardless of Chrysler’s ultimate fate (i.e., liquidation.) As the DetN recognizes, whatever the fine print, the union deal paves the way for American Leyland.
I used to worry that TTAC was too negative. I’d publish “good” news to try and balance-out our no-holds-bared criticism of Motown’s follies. At some point, I gave up trying to find a silver lining. It wasn’t simply the fact that there wasn’t one. Or that the news coming from Detroit became undeniably dire. It was more of a personal “come to Satan” moment, when I realized that making people happy wasn’t my first, best destiny. My job: tell the messy, pay-no-attention-to-the-logical-fallacy-behind-that-PR-curtain truth about cars. But there are times like now, on the cusp of Chrysler’s C11 (or worse), when I wonder what good can come of all this. Will we ever look back on this time and think that the Motown bailout was, somehow, a good thing?
As the Motown meltdown rushes towards its not-so-final denouement, a clear meme is emerging: blame the bankers. Last week, Detroit News columnist Daniel Howes suggested that Americans will finger Wall Street suits for Chrysler’s collapse. It was an odd not-to-say-jarring proposition—given that Chrysler’s management has done just about everything it could do destroy the automaker’s rep save impregnating car seats with swine flu. Ditto GM. And there’s a darker side to this idea, which I’ve previously resisted mentioning. I believe this line of thinking raises the specter of ye olde “international Jewish banking conspiracy.” I know, I know. Call me a paranoid fantasist (I’ve been called worse). But try reading this Automotive News “analysis” from an anti-Semite’s perspective: “The debate over the U.S. government’s bid to reshape the American auto industry through bankruptcy comes down to this: the spreadsheets of a handful of former investment bankers pitted against the street sense of thousands of U.S. auto dealers fighting to survive.”
Newsflash: the United Kingdom has just raised their top tax rate from 40 to 50 percent. That’s before (after?) the country’s 17.5 percent VAT on virtually everything a resident buys—save petrol, alcohol, cigarettes and other items covered by “sin taxes,” which are WAY higher. And council tax. And the rest. Which includes the tax on new car purchases. For company director types, that little item was calculated at 35 percent for the first £80K. After that, nada. But now, it’s 35 percent on the whole schmeer: the complete purchase price. The Times reports that “The move left some luxury-car makers fuming, in particular Bentley, which is owned by Volkswagen but has its factory in Crewe.”
You may have noticed that TTAC hasn’t joined the MSM’s celebration of Ford’s Q1 financial report. While FoMoCo didn’t lose as much money as analysts predicted—“only” dropping $1.4 billion in Q1—danger lurks around every corner. For one thing, the “it wasn’t as bad as everyone expected” rejoicing represents exactly the same logic GM deployed as it slouched towards Bethlehem. Look how well that turned out. For another, as we also pointed out during GM’s Long March to C11, you can’t cut your way to profits. At some point, Ford’s going to have to build something the North American car market really really wants. The forthcoming Transit van, turbo’ed Taurus, Fusion, etc. ain’t it. Fiesta? I wouldn’t don those sombreros just yet.
SEATTLE – Lamborghinis may be faster out of the gate, but it appears that Hyundai SUVs may have the edge when it comes to braking, at least in one instance. Motorist Kelly Davis snapped this picture of a traffic accident on Interstate 5 near Seattle Monday morning. The Hyundai Santa Fe hit the brakes in traffic, and the Lamborghini behind it wasn’t able to stop that quickly, sliding under the Hyundai. No one was hurt in the accident.
Yes, well, someone’s pride sure got dinged. [Thanks to Don1967 for the link]
Minnesota Attorney General Lori Swanson is fed up with the state of Illinois for issuing toll road photo tickets and collection notices to innocent drivers in her state. Swanson yesterday fired off a 75-page complaint to the Illinois Tollway, the Illinois Office of the Executive Inspector General and Illinois Governor Pat Quinn (D). Swanson enumerated the problems Minnesotans described when calling her office for help:
One of our commentators recently asked why the Lincoln Town Car got so much love. It’s an ancient body-on-frame machine that floats like a hippo and stings like a slug. I’m not sure this video answers that question, but I bet some of our Best and Brightest can.
Corporations that stand to gain millions if the Florida legislature legalizes red light cameras have created a network of victim advocacy groups to promote their cause. Central to this effort is Melissa Wandall, founder of the Stop Red Light Running Coalition of Florida. Wandall became involved in the issue after a tragic red light running accident took the life of her husband Mark in 2003. Wandall now uses her status as a victim to travel the state and to lobby the legislature on behalf of red light cameras. Sympathetic newspapers frequently run her opinion pieces on the eve of important committee votes. Far from being a grassroots effort, however, Wandall’s group is part of a slick marketing campaign funded in large measure by the traffic camera industry.
Once again, we’re looking at a “historic” agreement between Detroit carmakers and their unions that’s not what it appears to be. In other words, window dressing. The Detroit Free Press gives us the skinny on the accord between the Canadian Auto Workers (CAW) and The Presidential Task Force on Automobiles—sorry, “Chrysler management.” And the bottom line is that the CAW is giving up its usual bupkis in exchange for the usual “get out of blame free” card re: the company’s evolution into extinction. “Among the benefits the CAW is giving up are a semi-private hospital room coverage, a $3,500 vacation buyout, tuition reimbursement and employee discounts to buy Chrysler vehicles. There are no immediate cuts to the union’s base wage or pension benefits. But Lewenza did agree to significant work rule changes, including reducing break times for meals and bathroom trips to 40 minutes per shift. Regarding the health care trust fund, Lewenza said there was much work still to do and he did not say when it would be implemented.”
And now, a word from the “whatever is is” department . . .
Buried in the Detroit Free Press story trumpeting the Canadian Auto Workers’ latest agreement with Chrysler: news that the Presidential Task Force on Automobiles (PTFOA) plans to split the zombie automaker into two.
“We’re living to fight another day,” [CAW Boss Ken] Lewenza said. “But the fear and uncertainty is not over. Not by a long shot.” Specifically, he said representatives of Chrysler and Fiat told him that if Chrysler files for Chapter 11 bankruptcy protection next week, the company will be split into “a good company and a bad company. And the bad company would be sold off.”
Last night, Chrysler announced it had broken its deadlock with the Canadian Auto Workers (CAW). The press release couldn’t have been more vague if it had simply show a picture of a chocolate pavlova. Here’s the “we won’t show you the money” shot from Tom LaSorda, Vice Chairman and Co-President:
“We are extremely grateful to the CAW leadership and to its hard-working members for their openness in this challenging environment to create a new strategy that will lead this company on a path to success. We also want to recognize the Canadian Federal and Ontario governments for their energy and efforts in helping to move this great Company forward.”
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