Few will be surprised to hear that Chrysler Group will end production of its Dakota compact pickup truck next Tuesday, as sales of all small-to-midsized pickups have cratered over the last decade. Indeed, the Detroit News reports that the end of Dakota production will result in the layoffs of only 39 employees, although that number may climb as high as 150. In any case, the end of Dakota production is just the tip of the iceberg: Ford’s Ranger goes out of production in December of this year, and GM’s Colorado/Canyon twins will be discontinued sometime next year. Though Dodge plans to bring a minivan-platform-based AWD “lifestyle pickup” to market as a 2014 model, and Chevy is planning to build a North American variant of its new Global Colorado for the 2015 model-year, we’re looking at a several-year interlude in which no American OEM will offer a small pickup in the US. And looking at this chart, you almost can’t blame them…
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Steinway & Sons may be the last great American brand: from 1853 to the present day, the company has built world-class musical instruments by hand in New York. Unlike their contemporaries in the guitar-making business, Steinway never went through “bad times”, even after the family sold out in 1972. (Interestingly, although CBS bought both Fender and Steinway, the paths taken by the two companies under CBS ownership were very different.) Nor have they become mere cloacae for the diarrheal discharge of Foxconn’s suicide factories the way Hewlett-Packard, Dell, and Apple have. Steinway’s business model is simple and hasn’t changed for over a century. They build the pianos in the United States to exacting standards, charge premium prices for them, and everybody is happy.

The power of the Steinway brand is such that everybody from random auto reviewers to big-time ad agencies feels compelled to mention their products in an automotive context. Googling the Steinway name together with that of any major auto-media outlet will yield results ranging from dismal to pathetic. Engines, body panels, dashboards, radio switches, and brake feel are all likened to the company’s eight-hundred-pound musical gorillas. There’s something about Steinway that gets car guys excited.

Wait till they find out that Steinway was in the business of building automotibles before Soichiro Honda was born, and remains so, in minor fashion, to this day.

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Having been asked by a certain newspaper to review the new book “American Wheels, Chinese Roads: The Story of General Motors in China [more info on that review coming soon], I’ve been spending my quiet moments over the last week or so looking into GM’s Chinese operations. The book’s author, Michael Dunne, documents GM’s rise in the Middle Kingdom from the perspective of a well-informed outsider, revealing just how delicate one of GM’s best-performing global maneuvers really was. But after following the rise of GM in China, Dunne notes the December 2009 announcement that GM was selling a 1% stake in its Shanghai-GM (SGM) joint venture to its Chinese partner SAIC (for the paltry sum of $85m no less), arguing that GM had made a dangerous leap of necessity. This sale, implies Dunne, could well have been the tipping point that leads to GM being surpassed by its erstwhile junior (in size, technology and global reach) partner, SAIC. And, in the words of “one GM executive who used to work in China,” GM would need

good luck getting that back.

But, back in June, GM CEO Dan Akerson told GM’s shareholder meeting that he wants to do just that, saying

We have an option to buy that 1 percent. It’s our intention to exercise that.

With Akerson’s announcement, the mystery of GM’s “golden share” sale deepened. At first the question was simply “why would GM sell its 1%?” but now there’s another mystery: why would GM want it back? After some digging, it seems that we are now able to resolve the first mystery, and report why GM sold its one percent. But the whole deal is still surrounded by several layers of mystery which conceal whether GM will in fact be able to regain its 50-50 partnership in SGM, why it would want to and whether its gambit was ultimately worthwhile. And given how important China has been (and continues to be) to GM’s global business, this is definitely an issue that GM- and industry-watchers will want to better understand.

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When should a redesigned car get a new name? Whenever the old one wasn’t a success? Or virtually never? Can car companies count on the excellence of a new car to reverse whatever damage was done to the public perception of the model name in the past?

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I am sitting in a parking garage in a throng of torpid auto-journalists, nearly all of whom are wearing the same glazed expression of terminal information overload. On-screen, molecules of fuel and air are doing a complicated little computer-animated dance, as narrated by Susumi Niinai, program manager at Mazda’s powertrain development division. His English, while Japanese-accented, is better than, y’know, mine, but the concepts he’s explaining approach the limit of comprehensibility to the lay-person. Mind you, it’s a pretty nice parking garage.

Some of you, like me, may have been hearing all the rumblings about Mazda’s new SKYACTIV technologies and been wondering whether it’s going to turn out to be a series of technological breakthroughs or, alternatively, a load of complete cobblers thought up by some Zoom-Zoom marketing guru.

Good news everyone! It’s the former. Bad news everyone! I have to try to explain it to you. And I borderline don’t understand it myself. Here goes…

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A final rule for 2017-2025 CAFE standards won’t be published until September, but a pre-publication notice by the EPA [PDF here] reveals some of the key details we’ve been looking for. The broad strokes, which we are already well aware of are shaping up as follows:

NHTSA currently intends to propose standards that would be projected to require, on an average industry fleet wide basis, 40.9 mpg in model year 2021, and 49.6 mpg in model year 2025.  For passenger cars, the annual increase in stringency between model years 2017 to 2021 is expected to average 4.1 percent, and to average 4.3 percent between model years 2017 and 2025. Like EPA, in recognition of the utility requirements of full-size pick-up trucks and the unique challenges to improving fuel economy compared to other light-duty trucks and passenger cars, NHTSA intends to propose a lower annual rate of improvement for light-duty trucks in the early years of the program. For light-duty trucks, the proposed overall annual rate of fuel economy improvement in model years 2017 through 2021 would be 2.9 percent per year.  NHTSA expects to change the slopes of the fuel economy footprint curves for light-duty trucks from those in the 2012-2016 rule, which would effectively make the annual rate of improvement for smaller light-duty trucks in model years 2017 through 2021 higher than 2.9 percent, and the annual rate of improvement for larger light-duty trucks over the same time period lower than 2.9 percent.  For model years 2022 through 2025, NHTSA expects to propose conditional standards with an overall annual rate of fuel economy improvement for light-duty trucks of 4.7 percent per year

We had heard that trucks would improve their efficiency at a rate of 3.5% rather than 2.9% for the 2017-2021, and a 2022-2025 growth rate of 5% rather than 4.7%. But then, cars were supposed to improve by 5% in the 2017-2025 period, so both truck and car standards seem likely to end up lower than what the president’s report seemed to promise. But that’s not the only bad news for anyone hoping for tough fuel efficiency standards (or, good news for truck-dependent automakers)… with the release of this notice, we have an initial sense of the loopholes that will be included, and they appear to be of the hefty variety.

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Dare to suggest that a strong CAFE standard won’t ruin any automaker, and you’ll be overwhelmed by deafening cries of “what about the market,” “think of consumer choice,” and “don’t you tell me what to drive.” Now, I’ve made it very clear that I’m not a huge CAFE fan, but the fact of the matter is that since nobody is leading a charge for a gas tax (least of all the industry that says it would be a good thing) it’s the only option on the table. Which leaves just one question: why regulate fuel economy at all? There are all kinds of arguments against regulating fuel economy, but most stem from a desire to “let the market do its thing.” That’s an argument I’m highly sympathetic towards, but it doesn’t necessarily require that the government but out and let the era of cheap, thirsty trucks roll on unabated. What maybe, just maybe, if the market actually wants more fuel economy? Well guess what campers… according to research by IHS Global Insight [via Automotive News [sub], the market does want more fuel economy.

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If you asked an auto industry lobbyist, say, a month ago, what the big fights were over in CAFE negotiations, he probably wouldn’t have said “the number.” In the parlance of the Potomac valley, that means everyone at the table knows that at some point they’re all going to join hands and sing kumbaya over one highly symbolic number. Not surprisingly, the numbers that everyone in DC has been looking at fall right in the middle of these four scenarios… not coincidentally the tipping point where hybrids swing from a quarter to nearly half the market. But are these WSJ [sub] charts even accurate? John Krafcik, CEO of Hyundai Motor America and the industry’s CAFE contrarian implies that it’s not for everyone, telling Automotive News [sub] that

Honestly, our focus isn’t on hybrid. Our focus is on optimizing internal combustion and getting as many fuel-efficient vehicles out there, across the lineup. That’s the way you do it. If you look at the math, if you look at how CAFE math works, volume trumps everything.

But then Krafcik oversees a brand that doesn’t just sell lots of high-efficiency cars, it sells very few pickups… resulting in a sales-weighted fleet fuel economy 35.7 MPG in the first half of this year (as calculated by Hyundai). Did we mention that the 2016 passenger car standard is 37.8 MPG, at which time it figures its non-hybrid Elantra will get 50 MPG combined on the CAFE test? And nobody can look at Hyundai’s six-month sales performance (up 26%) and argue that Americans don’t want to buy fuel-efficient cars. In short, Hyundai is proving that automakers who can make money selling appealing, fuel-efficient cars need not binge on hybrids Even, according to the EPA’s final rule on standards through 2016, for manufacturers trying to sell as many pickups as possible.

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Alan Mulally should be named Chairman and CEO of General Motors…immediately. The General needs talented executive leadership with experience in the automotive industry. And if you look at the track record so far of GM’s present top management – Lt. Dan and his sidekick Girsky – there’s no reason to believe they’ll do any better tomorrow.

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Electric vehicles present all kinds of challenges to the traditional ways of understanding cars. From design to differentiation, from range to refueling, EVs simply act different than the internal combustion-powered cars we’ve been refining for centuries now. And yet, through consumer incentives and subsidized charging stations, governments seem to be barreling headlong towards the goal of simply replacing our gas cars with electric ones, as if the two were fundamentally interchangeable. Sadly this is not the case, and a study by Project Better Place and PJM Interconnection [PDF] illustrates in stark terms just how costly an unplanned, uncoordinated rush to electric cars can be.

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General Motors CEO Dan Akerson set off something of a firestorm a few weeks ago, when he said, in response to a question about forthcoming CAFE increases:

You know what I’d rather have them do — this will make my Republican friends puke — as gas is going to go down here now, we ought to just slap a 50-cent or a dollar tax on a gallon of gas.

Predictably, populists and economic alarmists of all stripes took great umbrage at Akerson’s candor, questioning his leadership of GM as well as his perspective on the shaky US economy. But Akerson is not alone in his support of some form of gas-tax increase. Bob Lutz and  Tom Friedman (an odd couple right there, if ever there was one) agree with him. Edmunds CEO Jeremy Anwyl defended Akerson and even suggested a $2/gallon tax earlier this year. Bill Ford and  AutoNation’s Mike Jackson are of the same mind as now-retired Republican Senator George Voinovich on the issue. And yet, inside the Beltway, the subject tends to draw a chuckle and a roll of the eyes. Everyone wants it, but nobody wants it.

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I designed TrueDelta’s Car Reliability Survey to provide information an average of ten months ahead of the established annual surveys. Early last December we shared with TTAC readers that ”Early data on the Ford Fiesta is not good.” Then, in early March, we stated about the 2011 Fiesta and the 2010 Taurus that ”Ford does not appear to have tested either model thoroughly enough.” The late February release on the TrueDelta site went a step farther, asking, “Is Ford slipping?” The answer last week from Ford: “Yes, but we’re going to fix it.”

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Mark Modica, a former Saturn dealer GM bondholder, has leveraged his financial loss at the hands of the government bailout into a blogging position at the National Legal and Policy Center, a conservative nonprofit that “promotes ethics in public life through research, investigation, education and legal action.” At the NLPC, Modica focuses on what he believes to be corruption surrounding the auto bailout, and has written a series of anti-GM posts that make TTAC look like a Detroit hometown newspaper (TTAC “bias police,” take note). Most recently, Modica has caught the attention of the auto media, including Automobile Magazine and Jalopnik, with a series of posts accusing Chevy dealers of “scamming” taxpayers by claiming the Volt’s $7,500 tax credit and then selling Volts as used cars. TTAC welcomes anyone seeking to cast more light on the bailout, but unfortunately, Modica’s attacks are too focused on making GM look bad and not focused enough on providing relevant information to the American people. Let’s take a look and see why…

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Tank testing at General Motors’ Milford Proving Grounds

To commemorate Memorial Day here in the US, we’re taking a look at how the American auto industry was mobilized into war production for World War Two. Because that mobilization was so extensive, the conversion to military production so complete, a blog post by it’s very nature cannot really do the subject justice. This is only the most cursory review of the topic, which truly deserves a book length treatment. As a matter of fact, historian Arthur Herman is currently working on a book about the “arsenal of democracy”, American industry during the war.

Herman will have a lot of material to work with.Today we’ll be looking at the role of the Big Three automakers in war production, starting with General Motors. Read More >

Bertel’s provocative piece on SaabUnited’s complex relationship with Saab and Vladimir Antonov has drawn a predictable response from the Saab faithful, who have rushed to defend their beloved but troubled  brand as well as its mysterious Russian “savior.” The outburst of anger at TTAC, though harsh to the point of almost blaming TTAC for Saab’s sorry state, is nothing new around these parts: TTAC has long angered the die-hard fans of many auto brands by calling for (or simply covering) the demise of brands that have outlived their usefulness to the market. Even the most basic understanding of TTAC’s history explains away the now-popular (in certain corners) theory that this site has a personal vendetta for Saab. On the other hand, perhaps we’ve been too focused on day-to-day developments to properly make the case for why Saab, sadly, needs to die. Luckily the reasons for Saab’s inevitable demise are not difficult to understand…

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