Initial stock offerings, bankruptcies, brands being shuttered, established manufacturers being taken over by other concerns, financial crises – a time of turmoil in the auto industry. The time I’m describing is not just the present, it could well describe just about any period in automotive history. With the possible exception of the 1960s, when the Big 3 consolidated market share gained after the independent automakers were reduced to American Motors, there really never has been a long period of stability in the domestic auto industry. Even in the 1960s, Chrysler Corp. stumbled badly.

About a month ago Wayne State University Press, one of the leading publishers of automotive history books, sent me a box full of their recent titles, most of which concern the earliest days of the American auto industry: David Buick’s Marvelous Motor Car by Lawrence Gustin, Maxwell Motor and the Making of the Chrysler Corporation by Anthony J. Yanik, The Dodge Brothers: The Men, the Motor Cars, and the Legacy by Charles K. Hyde, and Hyde’s latest book, Storied Independent Automakers: Nash, Hudson, and American Motors.

While reading up on early American automotive history and I couldn’t help being struck by a sense of the more things change, the more they stay the same.

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According to our latest sales data, the Detroit Three have enjoyed something of a comeback relative to the “foreign” competition this year. And though it’s not clear how long that trend will last, the media is catching the Detroit-boosting bug again.  The NYT’s Bill Vlasic epitomizes the mood, focusing on improvements in GM and Ford’s products in a piece titled American Cars Are Getting Another Look. Between IQS score improvements and anecdotal evidence of consumer interest in Ford and GM’s “gadgets” and “value,” Vlasic’s sidekick, Art Spinella of CNW Research, forwards an interesting theory for the death of the “perception gap” (a construct he helped create, by the way):

Ford has become almost the ‘halo brand’ for G.M. and Chrysler. Because of Ford’s success, people are less resistant in general to considering all of Detroit’s products.

Well, that’s not the dumbest thing ever said about the destruction of the perception gap… but it sure is a head-scratcher. Did Nissan and Honda just spend the last several decades skating by on Toyota’s sterling reputation (RIP)? Still, it might be interesting to hear Ford’s perspective on all this.

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In the eighties, the European auto makers were quaking in their boots at the prospect of a “Japanische Welle” (Japanese wave). Having seen the huge damage the Japanese brands inflicted on Detroit during the seventies and early eighties, they braced themselves for a similar onslaught. It never quite happened. Now they’re wondering if the Koreans are going to succeed where the Japanese fell short. There are plenty of indications to suggest they will. In Germany, probably the most auto-chauvinistic of all the  European countries, the Golf-class Hyundai i30 (above) is currently the number one selling import car, not counting VW’s captive import brand Skoda. Toyota and Honda’s European market share is down, and Hyundai’s is up, and growing quickly. Is the Hyundai Welle unstoppable? Read More >

Yes, I can muster some appreciation of Econolines of yore. But the painful reality is that the current E-Series is an ugly, primitive and inefficient pig virtually unchanged since 1974.  The fact that the American light truck sector hasn’t had the same revolution that European design influences have had on passenger cars is a mystery. Case in point: Ford’s Transit (not Connect) vans are a (several, actually) giant development leap ahead of the Econoline, offering FWD, RWD and AWD variants in three wheelbase lengths, numerous configurations, and driven by the most advanced diesels that can get well over 20 mpg. The Transit outsells Mercedes Sprinter in Europe. What the hell is Ford waiting for? Read More >

Later this month at the upcoming Paris auto show, Lotus will be revealing the first car that reflects their new strategic vision, a vision of going upmarket and luxurious to compete directly with the likes of Porsche, Ferrari and Aston Martin. The car, originally slotted to fill the role of the much beloved Esprit, will now be “something more” than the Esprit. The midengine supercar is rumored to be powered by the V10 engine that powers the Lexus LF-A. Toyota currently supplies Lotus with all of its production car engines. The LF-A’s announced production run of 500 units probably won’t cover that engine’s development costs, so the rumor makes sense.

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Earlier this week, newly-elected UAW President Bob King gave a speech before the Center For Automotive Research Conference, touting the deep changes that have transformed the union. The first half of King’s speech sounded a much-needed note of contrition, and highlighted the new spirit of cooperation between the UAW and Detroit’s management class. But a number of observers noted that the second half of King’s speech represents the flip side of the UAW’s new sense of responsibility for the fate of Detroit: a commitment to targeting the transplant factories that have made life hell for the union and the Detroit automakers alike. After all, nothing brings enemies together like a common adversary. But the UAW’s enemy isn’t just South of the Mason-Dixon line… it’s lurking within its own confused body politic.
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It’s called “convergent evolution”, and it refers to cases in which two unrelated, or distantly related, animals evolve to similar shapes or capabilities due to the pressures of their environment. Examples can be found here, with the most interesting one being the “pronghorn antelope”. It really isn’t an antelope, you see. It turns out that when there is pressure in an environment, animals will eventually all adapt to their optimum form for that environment.

While there are many unforgiving environments around the world, from the Sahara to the Arctic Circle, few are as murderous as the American automobile market. It turns out that the aforementioned “optimum form” appeared some time ago, and everyone else has been evolving that way ever since..Don’t worry. You may not believe in evolution, let alone the Mitsubishi Evolution, but I will serve as your John Scopes in this auto-Darwinian voyage.

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Now that GM’s acquisition of the subprime lender AmeriCredit has had 24 hours to sink in, howls of protest are starting to surface. The charge is being led by Senator Chuck Grassley, who has requested a review of the deal from the SIGTARP, saying

If GM has $3.5 billion in cash to buy a financial institution, it seems like it should have paid back taxpayers first.  After GM’s experience with GMAC, which left GM seeking a taxpayer bailout, you have to think the company and, in turn, the taxpayers would be better off if GM focused on making cars that people want to buy and stayed clear of repeating its effort to make high-risk car loans.

And though Grassley’s criticism could be read as mere partisan gamesmanship from a leader of “the party of no,” there are a number of very good reasons for opposing the deal.

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After the watching the OPOC engine run and shooting some exclusive video for TTAC, I was introduced to CEO Don Runkle.
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Predicting the future is a risky business. Lincoln Steffens, muckraking journalist and admirer of the Soviet Union said, regarding the then young USSR, “I have been over into the future, and it works.” Steffens apparently wrote that before he actually visited the workers paradise in the early 1920s. A decade later he regretted that endorsement.

Music writer Jon Landau’s prediction was a bit more accurate. “Last Thursday, at the Harvard Square Theater, I saw my rock and roll past flash before my eyes. And I saw something else: I saw rock and roll future and its name was Bruce Springsteen.” Landau was soon to edge The Boss’ original manager, Mike Appel, out of the picture, took over management of Springsteen’s career and production of his music, and did everything in his power to make his prophecy a self-fulfilling one.

Earlier this week I believe that I saw the future of transportation and stationary power and its name is OPOC. That stands for “opposed piston opposed cylinder”, a new engine architecture being developed for production and licensing by EcoMotors, a Troy, Michigan startup.

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Local Motors wants to create unique automobiles that conventional automakers cannot possibly make. They want to design with creative talent from around the world, using the Internet and open source practices to make computer renderings into reality. After seeing (via word-of-mouth Facebook event) their first offering, the Rally Fighter off-road coupe, I have to say this business model is so crazy it might actually work.

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GM’s government-installed Chairman/CEO Ed Whitacre hasn’t been wildly popular with Detroit insiders, earning dismissive raspberries from more than a few corners of the industry’s peanut gallery. But now that his reign of executive terror is over, Detroit seems to be learning how to stop worrying and love the former AT&T man. As Whitacre prepares for his first visit to Washington DC as head of GM, the local media and other members of “Team Detroit” are making their peace with Whitacre. So what lies beneath the new united front?

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Chinese dually. Picture courtesy transportfool.com

I spent an interesting Saturday with two old friends of mine. They had never met before. One, American, CFO of an insurance company, had been in the finance and banking business all his professional life. The other, born Chinese, naturalized American. Was one of the top mortgage writers in the Silicon Valley before the dotcom crash. Came back to China and heads a Chinese/American bank. The two got along splendidly.

Of course, we talked about money and cars. Recently, there was a discussion on TTAC on how the bursting of the Chinese real estate bubble would destroy the car market just like it had in the USA. I eagerly set out to pick their brains.

Quite oddly, the first one to throw water on the bubble theory was my friend, the staid CFO of the staid insurance company. Read More >

The New York Auto Show was a surprisingly robust event with a feast of products for any price point.  But covering a show of this magnitude as a lone reporter was no small feat. With a wealth of product comes a wealth of showy stage productions and, of course, a metric ton of happy babble from the company men. They have their job, I have mine. On to the truth.

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