I am comfy, reclining in my chair. It’s not a power-actuated Connolly-wrapped throne, but it supports me well enough, like the bench seats of American cars of yore. It’s so easy, sipping a coffee, commenting on the honor of an automotive world passing by. I’m enlightened by Edison’s accomplishment, a light bulb born of endless attempts, scribbling down the wretched life stories of Detroit, seeing the sad eyes of jobless people. I can not print down my tears on the keyboard, nor teleport the saltiness of its character.

I sigh, as millions do, the silent exhale of despair. I mentally walk the doomed path through the pages of the American car industry’s history. I look left and see union arrogance, indignation, intransigence and bully boy tactics. I look right and see management arrogance, incompetence, denial and destruction. I see missed opportunities and senseless distractions. I see pigs at a trough, oblivious to the abattoir's long shadow.

I consider the symptoms of the disease of disinterest, that’s leaving this once holy industrial landscape void. I see the smallest of nits. I taste, I feel, I smell those tiny gaps of a job left undone. A childish slip: those half a dime per square meter cheaper fabrics, those grayish knobs and squeaky rattles from unresolved underpinnings. I remember stories of mechanical failures born of apathy, whose correction was never offered freely, with humility.

I recall the early transgressors on Detroit’s turf, and admire— as millions came to do— their persistence. I celebrate their dedication– even as I decry the home teams’ inability to see past their fat paychecks and generous perks. How much effort would it have taken to respond, to stiff-arm the opposition, rather than laugh as they sprinted towards the end zone, and then, eventually, scramble to catch-up?

The resulting migration started as a trickle, and ended-up a torrent. In an aftertaste of a cheap, high octane alcohol, some still give in and forgive. In a never ending hangover, these supporters crawl out from the dust of zero rebates. Propelled by amnesia and increasingly willful ignorance, the cycle repeats itself. But the crowd shrinks, like a sweater washed too many times at too high a temperature.  

Relative to itself, Detroit’s gains are, now, enormous. And yes, their pickup trucks are still the gold standard. But there’s no escaping it: gas guzzlers are like beached whales that cannot return to sea. And dozens of factories are closing. Jobs are disappearing. An industrial waste land, a new rust belt, is aborning.

I wish I could remind Detroit that customers choosing transplanted metal ain’t aliens or Cold War spawns. They were— are— hard-working Americans who depend on their transportation for their quality of life. And the workers who can no longer earn their living from these keepers of the faith are real people too. Management dashed their workers’ expectations of a better life on the rocks of their scotch and soda. There’s only one thing more cynical: their union collaborators. 

Where is the discussion of this diaspora? Doesn’t the country know that the domestic automotive industry is still a major economic engine? Can’t they hear it faltering, misfiring? The fat cats can be forgiven. It is their nature. But what of the rest of us? Are we content to let these captains of industry run aground? Can we not see that we will, inevitably, pay for the lifeboats?

Eventually, as Detroit’s Big Three sink beneath the waves, an entire country will despair. Entire communities will be left with anorexic paychecks and bulimic monthly payments. On the wider level, without a viable industrial base, Americans march forward, wading the more and more shallow wadis of service industries, hanging the legacy luggage to our children who will carry on the entitlements and interest payments for the Rising Dragon and their Sakura neighbors.    

We should fret and fume, not shrink and shrug, at the apathy and awkwardness whenever fingers get reluctant on the first obstacles of detailing or finalizing an assembly line. We should rip those wires out from game consoles and recreate a can-do garage culture. We should get those comics books out of schools and teach our children not to believe in promises, but the sweat of their own brow. We should tell them that success comes from five percent genius endlessly polished by perseverance.

Perhaps not. Perhaps we should stand back and let society learn the truth of the old maxim: the more painful the lesson, the more important it is. And just let it go. Knowing that we have met the enemy and now, in southern transplant enclaves, he is us. Hoping that a new Detroit will emerge from the ashes of its own incompetence. A Detroit that can renew its contract with the American dream, and wipe the tears from its supporters eyes.

My personal highlight of Last year’s Dallas Auto Show was watching Sajeev work his magic on GM’s regional marketing director. He’d met her at the Houston Auto Show some weeks earlier, where they’d had a productive conversation. Apparently the Powers That Be within GM didn’t think that was a good idea. She was talking gaily with other scribes when we approached her. When she turned to greet us, her face darkened the moment she recognized the dashing Mr. Mehta. Visibly agitated, she hissed, “I can’t talk to you,” spun on her heels and scurried away. After a moment of stunned silence I asked TTAC’s lonely lothario, “Do you have that effect on all women?”

My, how I do love telling that story. Sadly, work commitments kept my friend, Don Juan Mehta, in Houston this year. So I flew solo at the 2008 DAS.

To put things in perspective, the press preview day at the DAS draws about twenty print journalists and a couple of local TV crews. Meanwhile, the press preview for the North American International Auto Show in Detroit lasts three days and attracts some 6000 media people from around the world. More than one-hundred new products were “revealed” at NAIAS. I counted one at the DAS. Celebrities, industry big wigs, and politicians vie to be seen in Detroit. In Dallas, all I saw was a small group of aging, overweight, balding, vertically challenged, writers wearing sensible shoes.

While less of a spectacle, the intimacy of the DAS provides far greater access to the objects that we’re all there to see: the cars. Aston Martin would never allow thousands of clamoring critics crawl all over their lusty DBS. Yet they are perfectly willing to permit twenty of us to sit behind the wheel and fantasize about violently ordering all 510 horses to the rear wheels, stat!

A few moments of solitude behind the wheel of the DB9 Coupe found me awed by authentic interior materials and old world craftsmanship. The aluminum instruments and bezels are actually aluminum, not plastic (plastichrome). The clock crystal is crystal, not plastic. Wood accents are really wood, not plastic. The headliner is suede, not plastic. The leather upholstery is leather, not plastic (vinyl).  The sense of luxury was so powerful that I forgave the car’s narrow foot wells and niggling ergonomic design flaws.

With Aston Martin still fresh in my mind, I wandered to Cadillac and sat my butt in the XLR-V. The home team didn’t fare well in comparison. Despite the marked improvement by GM’s flagship brand, it’s clear how far Caddy still needs to go before it has a truly world class interior.

While both marques employ leather, AM’s cows certainly have a better dermatologist. I suppose it’s unfair to compare an exclusive hand-built car to one rolling off a mass-production assembly line.  But GM chose to play in the $100K end of the pool and right now they’re in over their heads.

The only hint of controversy on the day came at the Hummer press conference. I meekly asked how Hummer planned to combat the rising drumbeat of accusations that the planet is being ravaged by enormous gas-guzzling SUVs, of which the H2 is the poster child. “Or is Hummer content to say ‘screw you’ to the rest of the world.” Okay, maybe that part of my question came out a little harsh.

Like a seventh-degree judo black belt, GM’s mouthpiece, a third-tier marketing manager, skillfully parried the question and deftly avoided giving me anything interesting to write about-– some unapologetic diatribe about customer satisfaction and that their customer’s don’t care about being perceived as gluttonous.

My surprise came from the woman who stepped up beside me. To the satisfaction of Mr. Goodwrench, she began a vigorous defense of Hummer, citing its excellent fuel economy relative to others in its class.  At first I thought the interloper was another GM hired gun. But the shabbiness of her appearance confirmed that she was, in fact, another journalist. I wouldn’t have minded her input if a group of us were having drinks and sharing war stories. But I was at the press conference to hear what The General has to say, thank you very much.

Perhaps this is further evidence of the enmeshed relationship between automotive news makers and the [supposed] watchdogs in the press corps. Or maybe this was just a run-in with a mad old cow with an irrepressible impulse to rudely butt in and speak for companies with whom she has no affiliation.

And thus ended another DAS press preview day.  I left with a bag of swag (including a jar of Super Hot HEMI Powered Barbeque Sauce), a camera full of hi-res pix, and memories of a few new cars for cubicle daydreaming, both mine and yours.

[Click here for William C. Montgomery's DAS Pixamo photo gallery ] 

The central question of Nevil Shute's “On The Beach:" how does the human mind react to certain death? The Cliff Notes answer: it can't. As clouds of lethal radiation descend on the novel's protagonists, they cannot help but continue their lives as normal, learning shorthand and planting gardens they will never see bloom. Alas, life imitates art. While the Australian car industry swirls (counter-clockwise) down the toilet of unprofitability, a new report confirms that its government patrons cannot commit to either rehabilitating or killing off the once-proud industry. Their predicament offers a number of valuable lessons about the global car industry.

Like its unique marsupial fauna, the Australian car industry has evolved in isolation, creating atavistic vehicles which have long been sheltered from the ravages of mainstream evolution by geographic isolation and protective tariffs. While most global markets have evolved towards small, efficient, front wheel-drive cars based on global platforms, herds of large, rear wheel-drive sedans with V8 power built only for Australia still roam the outback. But as the earth flattens, even the lost continent is feeling the effects of competition. Domestically produced cars have seen their market share drop from 30 percent in 2002 to under 19 percent. The entire sector has shed a quarter of its workforce since 2005. These deeply unsustainable trends point to an obvious and ancient choice: adapt or die.

But for Australia's leaders, this choice is too stark. A recently-released government report claims that Australia can not afford to even try to compete with its Asian neighbors in the small car-oriented, developing world markets (where global automakers are finding profits). "In essence, we need to look at the niche— what is Australia good at?" author Steve Bracks wonders. One needn't strain overly to find snarky answer to Bracks mission-central rhetorical question; the statistics in his own report scream “FAILURE” as loud as they can.

The report outlines a course of action which should seem familiar to Detroit watchers everywhere: keep building the same unwanted cars– just make them a little greener.  A half-billion Aussie dollar green-car initiative accompanies the report, in hopes that the government can simply throw money at efficient drivetrains for its large cars. This effort is far too little, far too late in a world where the hybrid market is already reaching maturity based on decades-old investments in green technology. The U.S. spent three times that amount on the Partnership for a New Generation of Vehicles between 1993 and 2001– with only concepts to show for the money.

Even if Australia could build cars that the world wants, the strengthening Australian dollar is erasing any competitive advantage the industry may have had in the export market. Meanwhile, import tariffs, which currently stand at ten percent, are also being eaten away by the rising currency. With tariffs scheduled to drop to five percent in 2010, the government has every opportunity to cut the industry free now, and see how it adapts on its own. But indecision rules the day, as the Labour government considers freezing import tariffs at their current, ineffectual rate.

The irony of all this is that Australia is perfectly poised to simply shed its auto industry. With unemployment statistics holding steady at a remarkable four percent, Australia's economy actually suffers from the happy malady of overemployment. In layman's terms, this means that Australia's 60k auto industry employees could find work elsewhere, in one of the country's many profitable industries. In an era of shockingly high commodity prices, the rich mineral resources of the land of Oz offer far more viable opportunities for Australia's economy than its saurian automakers. But even this startling fact isn't enough to inspire anything resembling bold leadership Down Under.

Australia's situation offers an abundance of lessons for American observers. The first is that the quirks of individual markets are subordinate to the efficiencies of global platforms. Ford's recent announcement that future rear wheel-drive sedan platforms will be developed stateside confirms this trend, and tolls the death knell of Australia as a unique vehicle developer. A corollary lesson to this may be that  the era of the large, powerful sedan is nearing its close, coming to an end in the land that gave it shelter.

The ultimate moral to the troubled narrative of Australian car production: if you aren't competitive, you will die. In the absence of real leadership from either the industry (choosing to adapt) or the government (forcing their hand by killing off tariffs), Australia's car industry will continue to wither on the vine. Half measures and failures of nerve do not deter the wheels of change. It's a fact that America's troubled industry players would do well to note.

[NB: This is the first time we (or anyone else I imagine) have ever run a father THEN son series of articles. Congrats to the Niedermeyer DNA.] 

Something I’ve noticed: no discussion on corporate governance can go longer than five minutes before executive compensation comes up. It’s as predictable as “the scream” coming up when discussing Howard Dean. And why not? As a possible recession looms, executive pay remains the same. If North America’s economy is coming down with the mumps, its automotive industry may as well have Ebola. Chrysler was declared “operationally bankrupt” by its own its own CEO (before a cynical volte-face), while billion-dollar losses mount at GM and Ford. Yet all the people at the top of America’s piston pyramid continue to be compensated quite luxuriously. What’s up with that?

Take Alan Mulally at Ford, for example. Mulally scarfed $28.2m (plus, plus, plus) to take the top job at Ford. The money was paid before Big Al proved he could earn the automaker $1 of profit. Supporters note Mulally’s track record at Boeing and the “opportunity cost” of his exit (including lost pension).

Meanwhile, GM CEO Rick Wagoner has spent an entire career watching his employer lose market share, shareholder value and money. Although Wagoner took a highly-publicized 25 percent pay cut two years ago, GM’s board has recently restored his salary to pre-2006 levels. They justified the raise by noting GM’s turnaround plan is on track to reach whatever non-defined goal it aspires to. Profitability is clearly not that goal, as it easily escaped the General again in 2007.

As (automotive) executive pay and (automotive companies’) financial performance diverge, it behooves us to see the bigger picture.

First, the phenomenon isn’t restricted to The Big Three. It affects their supplier base as well. Canada’s Report on Business reports that Ontario-based Magna International’s jefe, Frank Stronach saw a 50 percent increase in personal “consulting revenue” (from his own company) last year. Magna’s stock value shrank by 15.45 percent over the same period.

Of course, making a direct link between stock price and executive pay is a gross oversimplification; the kind that led to some of the short-term thinking that has allowed much of this situation to develop in the first place.

Qualitatively, Magna weathered a difficult year. Its number one customer (Chrysler) was sold to a private equity firm, sideswiped by a supplier bankruptcy, and saw a big shake-up at the top of its own executive pyramid. Then again, Stronach’s own bid to buy Chrysler failed, he couldn’t stop unionization efforts at his own plants (some say he invited them to smooth the way for a Chrysler takeover) and he failed to properly hedge against a low American dollar. Stronach also failed to retain majority control of his company.

For all his efforts, Stronach took home $40.1 million in 2007.

Closer to the rust belt, American Axle’s (AA) CEO Richard Dauch banked exactly $10,175,194 in 2007, up from a paltry $9,316,242 in 2006. Was Dauch’s failure to prevent AA’s labor strike of 2008 by acting in 2007 worth the extra money? More importantly, how can Dauch preach fiscal conservation to his striking employees when all four returning AA executives got pay raises from 2006 to 2007?

Meanwhile, Visteon’s CEO Michael Johnston earned $10,783,136, according to their latest SEC filing. Great pay for the man who oversaw the company going from a $163m loss in 2006 to a $372m loss in 2007. Again, I’ll add some qualitative insult to quantitative injury. Where was Visteon’s strategic plan to separate itself from Ford’s declining operations and diversify its client base? It was nowhere to be found, apparently. Visteon continues to depend on The Blue Oval’s fortunes.

In the face of shaky executive performance, you’ve got to wonder why automotive executives’ pay remains sky high. The prima facie explanation is supply and demand. In other words, many firms require top-level executive “talent” and very few people can supply it. Unfortunately, that’s not the entire picture.

The truth of the matter is that CEOs have significant influence in selection of board members, who then have the power to decide how much the CEO should be paid. Even Mr. Magoo would see that conflict of interest, which stifles price competition. Secondly, these boards use a composite benchmark of compensation paid out to executives of comparable public companies to determine what to pay their own CEOs. Neat fact: American Axle’s 2007 benchmarking included both Magna and Visteon! Welcome to the fat cat’s intricate way of saying “well, everyone else is doing it too."

Here’s the bottom line. If an executive can rake-in millions of dollars in compensation regardless of performance, what’s his personal incentive to make his company profitable? We see athletes whose performance languishes after signing guaranteed contracts. If pay, pensions and perks are equally guaranteed, should we be surprised to see CEO’s doing the same?

Scrap metal. The phrase may not mean much to you, a pistonhead who takes pride in his ride. But scrap is one of the most lucrative industries in the car business today. That old junk car in the neighbor's yard that would have been lucky to get $50 seven years ago is now going for over $200– on the steel content alone. When you throw in the recyclable platinum, aluminum, copper and lead into the mix, the revenue on an average junker is anywhere from $350 to $600 per vehicle. This inflation has implications for both the average Joe and the entire American automobile industry.

The environmental benefits of this market for dead cars are obvious. Vehicles that were once put out to pasture– with toxic fluids spilling into the soil and the surrounding landscape– are now, thankfully, a rarity. Companies are draining, crushing and recycling aluminum and copper radiators. Old batteries now go for $15 in many areas of the country. Even the rims that were once left on the beasts of old are being recycled and re-used by everyone from GM to the People’s Republic of China.

In short, simple economics has motivated both mature and developing automotive markets to do what environmentalists have been calling for over many decades: clean-up the remnants of our past consumption. 

The other far smaller benefit to recycling is local, or, to put it another way, industry-specific. The American scrap dealer buying all that leftover refuse is making some serious cashola. China has a nearly insatiable appetite for industrial junk, and they are far from alone in that demand. Japan's scrap iron and steel prices rose to $460 per ton this week. This competition for any old iron is putting some immediate money back into the hands of the recyclers. These local business’ neighborhood communities are enjoying the benefits of record prices for copper and steel. Many recylcing companies are investing in new technology.

Unfortunately, the seller’s market for scrap pretty much leaves everyone else in the proverbial lurch. Despite the current downturn in automotive sales, worldwide demand for car-building commodities has not, and can not, be satisfied by recycling. Commodity prices are still soaring. And that means that today's automakers have to juggle three not-so-pleasant options: raise product prices, find new ways to reduce their costs (usually through “design improvements”) or simply accept a lower level of profit. Others in the automotive food chain are even less lucky.

For low-income consumers, the high prices for raw automotive materials trigger far worse consequences. For starters, rising raw materials prices have forced some parts makers to the wall; they can’t simply pass on their costs to the manufacturers. (This is what precipitated GM's and Chrysler's recent attempts to sue and seize the assets of many of these faltering firms.) We’re already hearing reports of replacement part shortages due to the American Axle strike. The harder it is to get low-cost replacement parts for your car, the less it’s worth.

Meanwhile, long term, rising commodity prices hit manufacturers hard. How do you justify selling cars whose loss levels are getting worse by the day? This is not an easy question to answer. You can only sell your products at a loss for so long. Whether or not you believe any of the domestic carmakers are on the brink of disaster, the lack of affordable raw materials certainly helps speed these embattled automakers towards bankruptcy.  

Needless to say, that possibility would whack American consumers but good. A bankrupt automotive company has virtually no responsibility to anyone. You want the warranty honored? Too bad. You want parts now? Hold on a sec/minute/month/eternity. While it is certainly true that a bankrupt automaker would continue to do business, the chain of customer responsibility (such as it is) would be severely damaged. And the customer would literally pay the price.

If you think that I'm being alarmist, keep in mind that I've literally seen thousands of Daewoos stuck at auctions– for years on end– because the courts had to decide their rightful owner. Even today, few cars in the market are worth less in their market segment than a Daewoo. All things being equal, there are few events that can hurt a car owner more than bankruptcy (hence Detroit’s unwillingness to consider the nuclear option).

So we’re living in a new world, where old cars are less of a blight on the landscape but car owners and car makers face significant new risks. It’s no wonder Toyota’s heading to Africa for new sources of exotic metals and a GM exec was convicted of commodity related fraud (that cost GM some $80m). In this business, it's no longer the one who owns the gold that rules. It's the one who owns the steel, copper, lead, petrochemicals and lithium. 

As sure as night follows day, you can count on seeing the following after news of an automaker in trouble.  “___ is in talks with Renault/Nissan CEO Carlos Ghosn.” The other thing you can count on: these talks won’t amount to a hill of beans. At most, the result will be some sort of technology-sharing venture in some peripheral market or an engine deal for a car you’ve never heard of. Why all this sound and spin signifying nothing? Because the Brazilian-born auto exec knows which side of his bread is buttered. 

The biggest problem facing Renault Nissan (R/N) isn’t failure; it’s their lack of “success.” R/N’s operations are profitable, their factories efficient, their cars respected. All this is true, but… while both companies’ model lineups contain plenty of fine cars, there are no “segment-busters.” Worse, these R/N machines aren’t languishing in second place; they’re forgotten cars. 

Nissan’s USA ops are a classic example. The Altima and Sentra are not even mentioned in the same breath as Accord/Civic or Camry/Corolla, sporty performance or not. The Quest is buried deep in the minivan heap. Nissan’s crossovers are a mishmash: two-row vehicles in two sizes (and price points) with no true three-row offering.

Nissan’s American SUVs tell the same tale: competent enough, but lost in the shuffle. The recent meltdown/price war in pickups hit Nissan even harder than the beleaguered Chrysler Corporation. The Titan’s profits evaporated. Toyota, the new new kid on the block, managed to shift four times as many Tundras as Titans.

And that’s where it hurts. If you were to boil Nissan’s corporate motto down to two words, they would be “beat Toyota.”

If you were allowed a caveat it would be “especially in Japan.” Historically, chasing down Toyota on its home turf has been the doom of ambitious Japanese makers. Mazda is no longer an independent automaker (part assimilated by Ford) because they tried to fight Toyota in Japan; Suzuki’s making a push right now (film at 11). Fighting Toyota in every niche (and keeping enough capacity to match them) almost killed Nissan ten years ago.

Ghosn is still hailed as a savior and great business leader in Japan for pulling Nissan’s fat from the fire. But it’s important to note that most of Ghosn’s miraculous “fixes” were nothing more than cutting Nissan down to its actual size, jettisoning their unrealized ambitions. And just because Ghosn made Nissan see sense– in the short term– doesn’t mean that Nissan’s old guard have to like it. To trail Toyota can be borne. To trail Honda (the Taro-come-lately of the Japanese makers) is unacceptable.

This is the rub at Renault/Nissan: while they’re holding their own in terms of profits and market share, their natural rivals– both above and below– ARE gaining ground. 

With organic growth stuck resolutely in neutral, Ghosn understands that there’s only one other path capable of placating his Japanese taskmasters: adding another “partner” to the firm. After all, it worked before. Hence the abortive merger talks with GM— which ultimately served to consolidate both GM CEO Rick Wagoner and Ghosn in their respective executive suites. Hence murmurs of a Chrysler conglomeration.

Without delving too deeply into Ghosn’s Machiavellian machinations, it’s highly doubtful that the Brazilian-born auto exec is doing anything more than a head fake when he speaks of cooperation. Ghosn is smart enough to realize that trying to recapture the “magic” of the Renault/Nissan merger would put the company on a hiding to nowhere. After all and again, it wasn’t THAT successful.

IF the Nissan – Renault merger would have been wildly profitable, leading to a true Toyota-rivaling corporate colossus, Ghosn would now be untouchable. If the R/N merger had been an abject failure, he would have been axed. Stuck in the middle, Ghosn keeps the acquisition pot boiling. Removing him would kill the [theoretical] deal that would deliver the last bit of wanted size.

And if such a merger should happen, Ghosn's the only logical person to handle the change-over. Clearly, demonstrable, he's the consummate integrator. Other auto execs are sharper with numbers (though Ghosn's no slouch with financials). Others have closer ties to product (though Ghosn is quite the car-nut). But it’s doubtful any other auto exec could have held two such disparate automotive companies together while keeping them out of each other's hair. This is, was and will be Carlos Ghosn's genius.

As long as Nissan and Renault’s owners dream of expansion, Ghosn’s position is safe. The moment Nissan or Renault believe that Ghosn can’t fulfill their long-term aspirations, they will begin the process of finding someone who can. It is therefore in Ghosn’s best interest to fuel rumors of mergers that are not in the best interest of Renault Nissan or its [supposed] dance partners.

In February, lovers old and new turn their attention to matters of the heart. No 'bout a doubt it: automakers weren't feeling the love. Overall U.S. light vehicle sales dropped 6.3 percent in February and 5.3 percent for the year.  With precious few exceptions, sales were down across the board. And this time, the usually impervious foreign nameplates and transplants felt the pain along with their Detroit counterparts (although not quite as badly). Let's take a closer look at the love's labor lost.

Pickup Trucks

As you'd expect, as gas topped $3 a gallon, pickup truck sales tanked.  Chevy's Silverado plummeted 24.9 percent compared to last February, down 17.4 percent year-to-date. Ford's F-Series didn't suffer quite as badly, losing just 4.9 percent from last February and 6.5 percent on the year. The Dodge Ram finished the month 20.9 percent below February ‘07, dropping 19.7 percent for the year so far. Toyota's Tundra showed a 48.9 percent gain on last February. The Texas-built  pickup gained 65.6 percent on the year. However, ToMoCo was introducing the new model this time last year; sales were low for the first few months.

Passenger Cars

Chevrolet must still be having production problems with their "everyone wants one" Malibu. The new 'Bu only managed to increase sales 6.5 percent over the old model's February sales (a good January pushed sales up 29.1 percent year to date). Ford's Fusion recovered from a slow start in January, finishing February 12.1 percent higher than last year, with year-to-date sales up 1.2 percent. Chrysler's 300 continues its nosedive, down 11.6  percent in February and 10.8 percent for the year. The Toyota Camry was one of the few cars showing sales growth. The perennial sales champ finished the month up 8.6 percent, 4.6 percent ahead of last year.  The newly-renlarged Honda Accord isn't doing so well. Sales are down nine percent for the month and eight percent for the year.

Truck-Based SUVs

Truck-based SUVs… ouch. The Chevy Tahoe continues selling at sub-2007 levels, dropping 26.4 percent in February and 20.4 percent year-to-date. Sales of FoMoCo's Explorer showed roughly the same performance, declining 27.1 percent from the month last year and 23.7 percent so far this year. The Dodge Boys might want to put a bullet in the Durango's head before it embarrasses them any more; model sales sank by 39.5 percent for the month and 35.8 percent drop for the year. The recently reviewed Toyota Sequoia sales increased 13.2 percent for February and 14.3 percent for the year. But like the Tundra, the numbers compare the new model to the old– and sales volumes are so low that we're only talking about a difference of 300 trucks in February.

CUVs

Although overall crossover sales were down from January, GMC's Acadia was still up 38.5 percent for the month and 122.1 percent for the year. The Edge was Ford's bright spot, racking up a 45.9 percent increase over last February and increasing sales for the year by 66.1 percent. The restyled Toyota Highlander jumped 12.2 percent for the month and 16 percent for the year. The old-style Honda Pilot did even better, growing 24.3 percent compared to last February and  7.7 percent compared to last year.

Prius

Even though gas prices went up in February, Prius sales went down 10.9 percent.  They're still up 8.5 percent overall above last year so far, but sales were so robust in the first half of 2007 they may continue at sub-'07 levels for the next few months.  At least until gas starts climbing to the $4/gallon mark.

Total Sales

GM's turnaround must have turned around. After blowing their horn over a black January, GM turned in a Valentine-red February. They were down 12.9 percent from February of last year. So far this year, the General's down six percent from last year. Ford didn't do quite as badly, turning in a 6.7 percent drop for the month and a 5.5 percent decrease for the year .  Chrysler performed about as expected sliding 14 percent in February and 13.1 percent year to date. Even normally bullet-proof Toyota suffered in February, down 2.8 percent for the month, trailing last year by 2.4 percent. Thanks to CR-V and Civic sales, Honda managed to show growth in February, up 4.9 percent in 2008. HoMoCo finished 1.5 percent ahead year to date.

The Future

Even as new versions of the F-Series and Ram warm up in the bullpen, it doesn't look like anything will pull the truck market out of its tailspin. The CUV market will continue to grow, as Honda brings on its new Pilot and Chevy steals market share from the other Lambdas with the Traverse. In the passenger car market, attention's shifting to small cars– where Ford and Chrysler are woefully lacking and GM offers the the Korean Aveo. Add in GM's and Chrysler's supplier problems and Ford's financial difficulties and the future looks pretty bleak they're pulling the shades. Can any of them tame the shrew haunting the U.S. new car market? Watch this space.

If you’ve ever stood at a Swiss platform and watched a train pull in within seconds of its ETA, you’ll know that this small country knows how to get shit done. The Geneva auto show is no exception. Its precise schedule and small scale make it the crown jewel of car confabs. This year, there was enough greenwashing to scrub the Amazon clean. Where once style, performance and a beautiful babe made show cars sexy, halo cars must now wear a badge proclaiming “Saving the planet one car at a time.” As if.

Of course, a hypocritical herd instinct does not an exciting auto show make. How many plug-in diesel-electric belt-assisted hydrogen-fuel-cell regenerative-braking lithium-ion dual-fuel unrealistically aerodynamic hybrid alibimobiles planned for 2011 were there? Lots. Suffice it to say, GM introduced its fifth hybrid powerplant at the Geneva show, a marginal improvement that’s testimony to the intensity of the PR war waged in the name your home planet.

And let's not talk about non-news such as the Audi A4 Avant. Or the Toyota Urban Cruiser (wasn't there an Al Pacino movie by that name?) which leaps to the top of the ten most boring Toyotas ever made in the history of the world, ever.

Meanwhile, the Tiny-Yet-Sexy niche continues to, uh, grow. We’re talking (comparatively) expensive little things that intend to make you feel good about yourself, the environment and parking (not necessarily in that order). As Paul Niedermeyer pointed out, this is the small car future that the MINI started. Toyota's iQ could take it mainstream. Priced higher than the larger Aygo, it looks great and sips fuel.

Another important trend: the Almost-Disposably-Cheap-Yet-Quite-Crap car. Mr. Tata brought the Nano to Geveva in his hand luggage. It’s an attractive appliance, a sympathetic amoeba on roller skates. Yes it has 12" wheels, but the original Mini had ten-inchers. The €9k-ish Dacia Sandero is of the same ilk. Taking purchasing power parity into account, that’s about $8k net, list. The Nissan Pivo is a bit more expensive and a lot more sci-fi, but if this is the future, include me in.

If you need another sign that Renault-Nissan is bursting with self-confidence, how about the Euro-Zone launch of their American (shhh) Infiniti brand? The FX50 is quite the looker. It’s not the segment buster they need, perhaps, but the FX is a lot more distinctive that the G-cars that’ll battle Bimmer’s best.

The stubby/cheeky Audi A3 Cabrio lives somewhere between laughable and laudable. The Cadillac CTS Coupe may not be the brand builder traditionalists seek (V16?), but it gets nothing but props here. It’s Caddy’s best chance abroad. 

I liked the suicide doors on the future Opel Meriva– it's a good sign when a company devotes itself to a topic as prosaic as entry and egress. Surprisingly, the Passat CC is a fantastic improvement on the conventional, frumpy Passat. Honda displayed its handsome, competent Euro-Accords on a blood-red floor. The setting was dramatic, but unnecessary– unless you’re a big fan of The Shining.

Kia's Soul concepts, which intend to emulate Scion in being young & groovy, is interesting, but not quite convincing. The Soul Burner: I thought that was something you ordered at the Indian-food takeaway. The Soul Diva: a bit Paris-Hiltonny, no? The Soul Searcher: this one I liked. Rural and tough-looking, but not macho or in-your-face. Sorta kinda like the Cévennes Turbo-CNG: a futuristic eco-car which rips off the Porsche 356? And the Magna-Steyr Hybrid is the way I like off-road vehicles: less fat, more fun!

BMW showed its X6. It looks a lot less ugly in the metal than on paper, but it still makes about as much sense as broken cuckoo clock. The Skoda Superb is a lot more sensible, although BMW called and they want their Hoffmeister kink back. Volkswagen should consider taking back– and Americans should stop lusting after– the new Portuguese-built Scirocco. It’s a lumpen, fat, graceless, derivative car: an amalgam of Alfa Brera, VW Passat and whatnot.

BYD– isn't that how they pronounce "bird" in the Bronx? In this case, it stands for Build Your Dreams, Chinese style. Of course, Geneva was full of catchphrases. Maserati had "Excellence through Passion." Bentley left the caps lock on, promising "RELAXING EXILARATION," "DRIVEN BY YOUR DESIRES" and "THE SEDUCTION OF YOUR SENSES.”

VW officially unveiled their new global mantra: Engineered Like No Other Porsche in the World. No, wait. It was “Das Auto” or “the car.” This must piss-off Pontiac, who now insists that Pontiac is Car. (This reminds of Garp’s father in The World According to Garp, who lost letters as he lost his life.) No matter what you call it, the main message coming out of Geneva is that small is beautiful. And there’s nothing wrong with that.

Click here to view Pixamo gallery of the Geneva Auto Show 

“Scion does not recommend towing a trailer… your vehicle was not designed for towing.” Welcome to the great American anti-towing conspiracy. Manufacturers of anything less than a big SUV or pick-up are trying to take away our God-given right to tow with our cars. For a guy who’s towed everything from a Radio Flyer wagon behind a pedal-powered John Deere sidewalk tractor, to a three-bedroom house, I feel like I’m being singled out. Of course, there’s a possibility that I’m the cause as well as the target of this jihad. A lot of lawyers do drive the Ventura Freeway, and one of them may well have seen my spectacular stunt with a trailer. Read More >

Picture this: Toyota outsells GM and Ford combined. Chrysler is long gone, having sold their factories to a foreign automaker. Meanwhile, GM and Ford import all their products from low-wage countries except for large sedans, whose drooping sales figures are propped-up by fleet sales. Imports fill the top eight spots for retail sales. In the face of massive imports and a strong currency, the Big 3 (Toyota, GM, Ford) informs the feds that they’re considering ceasing all remaining domestic automobile production. Welcome to the Down Under (and out) car market of Australia.

American car enthusiasts tend to envision Australia as an American mini-me holdover from the good old days, when traditional RWD sedans with big straight-six and honking V8 engines dominated the roads and the sales charts. In that rose-tinted rearwards-gazing scenario, the Australian divisions of Detroit’s Big 3 carve-up big chunks of the market for themselves, stake claims on the best selling cars, and generate handsome profits for mother Detroit.

In reality, Australia’s domestic car industry is hanging on by a thread. In fact, the antipodean market offers a scary glimpse into the possible future of the American automobile industry.

Back in the day, Chrysler of Australia created some legendary machines with hemi six cylinder engines that Ford and GM’s V8s couldn’t catch. Ultimately, it was to no avail. In case you missed it (or you’re younger than thirty), Chrysler called it quits Down Under in 1980. Twenty-eight years after Chrysler handed the keys to their plant to Mitsubishi, they’ve announced its closure.

Analysts who think GM and Ford will get a boost if/when Chrysler goes bust in the US should consider the Australian example. Since Chrysler withdrew, GM's Holden and Ford-AU’s market share has fallen even more precipitously than their American parents'. Holden now accounts for about 15 percent of Australia's new car market. Ford is precariously close to single digits. Toyota dominates, with a commanding 25 percent market share and most of the top-selling cars and trucks.

And yet, Holden and Ford still claim bragging rights to the number one (Commodore) and number two (Falcon) selling cars in the land of Oz. Pay no attention to those men behind the curtain. In another eerie equivalent to stateside PR, their claims are based on smoke, mirrors and fleet sales.

In Australia, the major manufacturers have agreed among themselves to not reveal fleet sales. They believe (rightly) that the numbers would damage public perception of the home-town teams. The Sydney Morning Herald managed to get their hands on a set of stats– and no wonder they’re secret. No less than 81 percent of the Commodore’s sales and 88 percent of Falcon’s sales sailed with the fleets.

Amongst buyers paying with their own money, the Commodore was merely number nine; the Falcon a distant fifteen. Not surprisingly, the Corolla is tops with private buyers, followed by the Mazda 3 and the Toyota Yaris. Holden’s best seller (to the public) is the Korean-built Barina (a.k.a. Chevrolet Aveo).

It turns out that Australia isn’t a parallel universe, immune to oil prices and environmental trends. The market for large cars declined 37 percent in 2005 and 2006; and it’s still contracting. The Toyota Camry is the only locally-made four-cylinder large car. The Aussie Big Two never developed smaller cars, and didn’t build a single four cylinder car for… just about forever. Ford has only just started building the Focus locally.

Ford’s restyled Falcon has just been revealed, but it’s riding on a tired old platform that wouldn’t cut it beyond its loyal but rapidly shrinking fan base (think Crown Vic). Thankfully, Ford has just announced the final solution to the geriatric twosome: a clean-sheet next-generation RWD platform to be developed in Australia.

By the same token, Holden has become GM’s RWD “home room.” It’s vying for development of the small RWD Alpha platform. But exports of Aussie RWD vehicles are not viable (G8 excepted). In fact, Ford may import the next-gen RWD cars or stampings from the U.S. These development projects don’t guarantee a future domestic production industry.

Bottom line: GM and Ford’s Australian units are sinking fast. Holden reported a $145m loss in '06, and $146m in '07. Ford-AU nicked mother Dearborn’s pocketbook a bit more gently, with a loss of merely $40m. No wonder GM and Ford are throwing development dollars for rear wheel-drive (RWD) cars to the Aussies. Without the imported bucks, they might soon be toast.

Meanwhile, the Australian reports that senior auto executives are warning that “union trouble or higher wages would be a poison arrow” for local car manufacturing. And Toyota is “reviewing” local Camry production. At the same time, China has targeted Australia for future automotive exports.

Welcome to the future.

If you think it's hard keeping up with the auto industry on a daily basis, you should try figuring out what the future holds. Just five years ago, no one would have predicted an aircraft executive would be running Ford, Chrysler'd still be selling Vipers (or Pacificas or much of anything) or GM would be embracing hybrids. So what's going to happen in the next five or ten years? It's hard to say. But since we've never been known to lack for an opinion on anything, here's a look at the future, TTAC-style.

GMNA Files for Nonprofit Status – After losing money for the past 25 years, General Motors North America filed with the IRS for status as a non-profit organization. CFO-for-Life Fritz Henderson explained the rationale behind the move: "After all that business with the Volt's windshield wipers, we finally realized we're never going to turn a profit with our North American operation. So Rick and I decided we should get the maximum benefit from our situation and write-off the salaries of all our executives." In other news, GM said it was developing a new, rear wheel-drive platform for its "premium economy" Saab, Saturn, Pontiac, Buick and Cadillac models.

Ford Renews Wagner's Contract – Even though Mercury's last customer died five years ago, Ford has announced that they've extended spokesperson Jill Wagner's contract for another three years. "Jill's got– I mean is our finest asset," said Ford's President of Public Appearances, Mark Fields. "She'll continue to appeal– I mean appear in all our commercials." When asked why there were no cars shown in the ads, Fields replied "That's not part of the process." 

smart USA Announces New Marketing Program – smart USA has revealed that they've formed a partnership with NBC's reality show "The Biggest Loser" to promote their ailing automotive brand. Spokesman Harold Clark denied that the company had asked Mark Burnett to change the show's title to "The Smallest Loser," and promised that the product placement deal would show the slow-selling city car in a highly favorable light. "This year, the first person to lose enough to fit into the smart wins the contest and the car. Additional prizes will be given to those contestants who finish the show weighing less than the fortwo." When reminded that the brand's tie-in with the reality show "Little People. Big World" hadn't stemmed the sales slump, Clark replied "I told you not to tell me that."

Lincoln Introduces New Model – Ford's worldwide luxury Lincoln division unveiled their new MK7W8R4Z. The new model's based on the latest U.S.-spec four-door Ford Focus. Continuing Lincoln's new "Reach Backwards" theme, it features a four-cylinder engine connected to a five-speed automatic transmission, with an upright grille, padded vinyl top and spare tire bulge in the deck lid. The MK7W8R4Z comes with SYNC 6.7, which promises to fix the bugs found in SYNC version 1.0 to 6.6.

Chrysler Completes Outsourcing – Cerberus has completed the final stages of Chrysler's "It's a New Day" program by licensing the Jeep name to Mahindra & Mahindra (M&M). This marks the end of Cerberus' venture into auto manufacturing. Over the last two years, they licensed the Chrysler model names to China's Chery and the Dodge model names to India's Tata Motors. "This certainly is a ‘New Day' for Cerberus, as they reap license fees from M&M Jeeps and Tata Magnums," explained former Chrysler CEO Bob Nardelli from his yacht, the Golden Parachute.

Kirk Kerkorian Dead at 117 – The AP reports that billionaire Kirk Kerkorian died three years ago at the age of 117. Friends of the "Lion of Las Vegas" were shocked by the news. "Who knew? Kerkorian mouthpiece Jerry York had spoken for him for so long that everyone just took it on faith that he was saying what Kerkorian told him."  "I just thought he was taking another nap," York explained. "Anyway, I've worked for him so long that I knew what he wanted in any given situation. I just didn't see the point of bothering him." When questioned about the future of Kirkorian's Tracinda Corporation, York indicated he wasn't worried. "Kirk gave me power of attorney 10 years ago."

President Clinton Raises CAFE Standards to 100mpg by 2030 – President Hillary Clinton announced she's working with Congress to raise Corporate Average Fuel Economy (CAFE) requirements. "There is no reason why a combination of good old American know-how and massive federal subsidies can't create vehicles capable of driving 100 miles per gallon of E85 gasoline, with zero emissions," Clinton said. When asked how much the new technology would cost the average consumer, President Clinton said "Nothing– at least as far as they know."  

No new prehistoric zooplankton and algae are dying. That’s the best part of the peak oil argument. Oil prices currently hover around a $90 a barrel- and have shown a slight decline- because many people believe we’re getting to the bottom of this keg, while serving more customers than ever. That line of reasoning ignores the back room where there could very well be a stash that can keep this party going.

Oil doesn’t have to be $90 a barrel. That’s the short-term price, based on supply that’s more or less fixed for five years into the future. Looking at the long term is tougher, for both peak-oil Chicken Littles and the Hummer sales force. In other words, any price that goes up, can also come down.

If your two-year-old wants more fries, McDonalds will sell you more fries. They don’t have to find new fields in which to plant new potatoes, then harvest, chop and fry. If they did, and you asked for more, they’d ask what you’d pay. You and the other parents with kids screaming for more fries could bid the cost up to $100 bag. 

According to the International Energy Agency, the world is pumping out about 85 million barrels of oil a day. The world wants about 86 million barrels. That inequality forces up the price. Traders literally bid on futures, pushing it skyward. But, the more a barrel is worth, the more oil suppliers want to supply. And, the more a barrel costs, the less consumers are inclined to buy. All of which can– and should– pull prices back down.

Ironically, given how fast oil can propel a Gallardo or a Gulfstream, the world of gooey, gunky oil goes slow. Once significantly motivated to reach for higher fruit, it can take years for energy companies to pick it. Oil from shale, tar sands, deep Gulf of Mexico waters or the Arctic is ready and waiting; it’s just not easily accessible. It takes time and money to gear up. None of the tough stuff was considered profitable for $15 or $20 a barrel. When oil gets above $30 they wake up the engineers. When it nears $100, all sorts of new production possibilities arise.

Unless you’re The Organization of the Petroleum Exporting Countries. OPEC can probably increase production tomorrow afternoon. They talk about it all the time, because while they’re making tons of money now, they don’t want their gravy train to, you know, end up like America's passenger trains.

In 1981, while oil traded at $39.50 a barrel (roughly equivalent to $100 today), Saudi oil minister Sheik Yamani warned, “If we force Western governments into finding alternative sources of energy, they will.  This will take them no more than seven to ten years.” Yeah, and that’s before global warming had it’s own Oscar and hybrids were bred for Merlot.

High gas prices can also enhance– if not trigger–  an economic downturn, which fuels decreases in demand for oil, again forcing a return to a more palatable equilibrium. “Prices may move substantially lower if the economy keeps worsening and OPEC continues to boost production,” Rick Mueller, Director of Oil Practice at Energy Security Analysis Inc., told Bloomberg News recently. “There could be a series of large inventory builds as demand slips. Prices could easily fall into the $70s if this occurs.”

The price could drop even lower. Ethanol flows now, with new development techniques on the horizon and subsidies on the books. Energy from natural gas, nuclear and conservation increases each quarter.

Not that we’ll ever see $10 barrels again. While supply CAN climb, the world’s demand for oil IS climbing. It goes up by around a million barrels per day, every year. The US is the biggest pig at the trough, but China and India slurp up more and more each year.

Jeroen van der Veer, Chief Executive of Royal Dutch Shell (the world’s second largest oil company), told his staff in late January that output of conventional oil and gas was close to peaking. He wrote: "After 2015 supplies of easy-to-access oil and gas will no longer keep up with demand."

British Petroleum (the world’s third largest oil company) Special Economic Advisor Peter Davies agrees in part. But Davies believes demand is going to reel in production. Reporting to Parliament in January: “BP has proven the world has oil reserves of 1.2 trillion barrels, enough to sustain current output for 40 years.” Davies thinks the globe can crank out 100 million barrels per day, covering demand and pressuring price.

Put another way, enough ancient plant matter died to get us to 2050. We’ll need more sustainable energy after that, regardless of whether or not you believe humans spit in the winds of climate change. Sure, oil consumption will eventually be extinct, but in the near future gas may stop taking such a big chop out of your paycheck.

For four months, the Canadian dollar has been flirting with U.S. dollar parity. And yet the same vehicles cost more north of the border than south. As America’s NAFTA neighbor imports more and more American cars, basic theory holds that automakers would eventually cut Canadian prices to eliminate arbitrage. “Eventually” hasn’t happened. Just as it was back in October 2007, the Lincoln Navigator is still $28k cheaper in the U.S. than Canada. Why?

The answer probably lies in that great evil that has ruined many naïve economists’ dreams since man began to theorize: asymmetrical information. If we assume Canadians are rational buyers who maximize their well-being, we must conclude that they simply don’t know how easy it is to import a vehicle, or that many vehicle warranties still apply after import, or that a price difference even exists at all. So let’s call it what it really is: ignorance.

Seeking some anecdotal evidence, I probed my immense social circle on the possibility of importing a car. Most don’t even realize it’s possible. One claims there is no price difference. One claims they can’t be imported (he’s never been to www.riv.ca). Another friend claims he’d have to pay huge duties (none on vehicles built in the NAFTA zone, 6.1% on others).

And then there’s the warranty—or the perceived lack thereof. Notwithstanding that the Toyota brands (Lexus, Scion, Toyota, Subaru) all honor U.S. warranties for non-residents, the savings on an import can easily exceed the expected value of warranty repairs. It’s a medley of counter-arguments that make as much sense as Star Trek technobabble; which is to say, none at all.

The automakers, predictably, are reacting in a manner that highlights the self-imposed captivity of the Canadian market. BMW and Mercedes USA have retained the decision to allow exports from the U.S. on a car-by-car basis, forgoing the Canadian legal process for approvals en masse.

Porsche has announced a “price-matching cut” on some of its Canadian models. Cut, yes. Price match, no. A quick look at the actual numbers reveals that the 2008 base Cayenne now costs Canadians C$55,200, down from C$60,100 in 2007. That seems like screaming deal– until you discover it’s still about $7k more than what Americans pay for the exact same vehicle.

Other manufacturers played legal games. Honda, Subaru, Toyota and General Motors all refused to certify that their 2008 USDM models were equipped with immobilizers, making them illegal in Canada. In a delicious irony, a 2008 Honda Civic built in Ontario and exported to the U.S. could not, for a few months, be repatriated and legally plated in Canada. As “illegal” cars piled up in driveways and border depots, manufacturers eventually relented and gave their blessing to Transport Canada. The latest RIV.ca update includes all of Honda’s 2008 models.

Honda didn’t stop there. Last fall, Honda Canada launched an insidious marketing campaign that highlighted differences in American and Canadian Hondas, noting that Canadian Hondas are better prepared for the rigors of Canadian winters. "The vehicles that are produced for Honda Canada are supposed to be sold in Canada to Canadian buyers," said Art Garner, public relations manager for American Honda Motor Co, at the time.

Needless to say, Upstate New York, Minnesota, Maine and New Hampshire all are cursed with winters that easily match anything experienced by the 95 percent of Canadians who live within 100km of the U.S. border.

Faced with unjustifiable price differences, the apologists eventually came out of the woodworks. Consider David Booth, of the National Post, who recently advanced the idea that having Canadian prices pegged to fluctuations in the U.S. dollar is not practical due to currency volatility.

Bollocks! The Canadian dollar’s movements have been quite predictable since January 2004: a slow, steady rise from about $0.67 U.S. to $1.00 US today. The average model life of a car is about five years. Since 2004, many manufacturers have had ample time to revise Canadian pricing on newly-introduced models. This, when the trend was obvious to all but the most financially disinclined.

In fact, when the dollar hit its historic low of $0.6179 U.S. back in January 2002, the Navigator I mentioned at the beginning of this editorial was only about $2k cheaper in Canada. Put another way, the only time the Canadian dollar sank low enough to bring Canadians to the economic point of indifference for a Navigator was when it was in the biggest slump it has known since… wait for it.. 1858! Where’s the unpredictability in that?

Canadians imported over 137k vehicles in 2007. It wasn’t enough to “readjust” prices. As long as Canadians do not force equalizing adjustments to prices, automakers will be happy to trot out shady marketing and legal mumbo-jumbo in the pursuit of profits. In the meantime, captive Canadians will get the prices they deserve.

In '78, OPEC put America's balls in a vise. Responding to the Oil Crisis, Washington enacted a “gas guzzler tax.” The law levied a federal surcharge on the price of any new automobile that burned fuel at the rate of 21.5 mpg (combined), but less than 22.5 mpg (combined). The worse the car’s EPA mpgs, the higher the tax its buyer had to pay. The effectiveness of the federal gas guzzler tax is beyond debate. Literally. No one claims the purchase tax did anything whatsoever to reduce America’s oil consumption. And yet it’s still with us. What’s more, it’s about to make a comeback.

In case you were wondering, the federal gas guzzler tax rate hasn't changed since 1988. The surcharge still starts at $1k; rising to a maximum of $7,700 for vehicles that get less than 12.5 mpg combined. Did I mention that SUVs and pickup trucks are exempt?

Yes, there is that. When the gas guzzler tax was born, SUV and light truck sales accounted for less than 25 percent of total new car sales. According to Automotive News, the genres now account for 52.5 percent of all American automobile sales. 

So if the federal gas guzzler tax was such a great idea back when oil supplies were tighter than a figure skater’s leotard, why not close the loophole now, what with global warming threatening to exterminate billions of humans? Surely that’s a better plan than concocting a cockamamie scheme to force automakers to change their vehicle mix to satisfy an arbitrary average fuel consumption figure? Why not penalize buyers of gas guzzlers and, by doing so, incentivize fuel misers?

Obviously, the domestic manufacturers of said gas guzzlers– automakers who continue to depend on the four-wheeled big ‘uns for their survival– oppose any move to close the SUV/CUV loophole and reinvigorate an otherwise moribund measure. But Detroit’s political power ain’t what it used to be– as witnessed by their failure to win the “debate” over raising federal Corporate Average Fuel Economy (CAFE) requirements. So if "the people" are serious about forcing the country's motorists to switch to more fuel efficient vehicles…

They’re not. The vast majority of American motorists aren’t even up for higher gas taxes– never mind an “SUV tax” down on the showroom floor. Hence CAFE. CAFE maintains the illusion of free choice while “doing something” about the “problem” of low mileage vehicles. It hides the gas guzzler surcharge by passing it on to manufacturers in the form of fines and/or technological costs, which the carmakers then pass on to the consumer. The feds get their money, the carmakers get theirs, and everyone feels virtuous.

There is, of course, a fly in the ointment: California.

The Golden State is truly, madly, deeply committed to taking gas guzzlers off the road. After unsuccessfully attempting to do so by hijacking federal tailpipe regulations, they’ve now decided to think outside the witness box. They’re introducing their own, additional tax on gas guzzlers. 

Once again, CA legislators will vote on a plan that would levy one-time registration fees of up to $2500 on low-mileage vehicles. Some “cleaner” SUVs, pickups and minivans would be exempt. Buyers below twice the federal poverty level and businesses with less than 25 employees would be exempt. And  buyers of fuel-efficient cars (e.g. the Toyota Prius and Honda Civic) would get hefty “rebates.” Everyone else has to pay for the privilege of paying more at the pump.

No matter how they tweak it, AB493 is a greater a threat to Detroit than California’s ongoing attempt to supercede federal CAFE regs by classifying CO2 as an atmospheric pollutant. That effort was an arcane, back door maneuver destined to fail. This is a full-on assault that challenges environmentally sensitive consumers to put their money where their mouth is.

And it’s going down. A previous version of the bill was only narrowly defeated in June, when auto industry lobbyists convinced seven LA Democrats to abstain from the vote. (Note: abstain, not oppose.) While you can easily argue that the feds should reserve the right to set air quality standards (which they only “lent” to CA anyway), a state sales tax is, clearly, their own business.

So will it work? Will people stop buying gas guzzlers if they cost an additional $2500? Thanks to the SUV loophole, the federal gas guzzler tax has nothing to teach on this matter. We certainly know that onerous automobile taxes in various New England states have created hundreds of thousands illegal, out-of-state registrations. But the simple answer is no. As car salesman will say, $2500 is only $1.37 per day over five years.

Which probably means California is, like the planet, just getting warmed-up. Gas guzzler tax supporters fully embrace the European model, whereby any and all taxes aimed at motorists are a good thing, and those aimed at low-mpg models are great. But the plain truth is that no matter how they’re applied, punitive motoring taxes create an automotive underclass, and enlarge governmental powers. Two fundamentally un-American concepts.

The press preview for the 2008 North American International Auto Show is finally over. TTAC’s Texas twosome– Sajeev Mehta and I– did our level best to catch the major reveals, grill some suits and get a feel for the temper of the times. On the plane back to the Lone Star State, I collected my thoughts on the show’s winners and losers. Were the carmakers fiddling while Rome burns, or preparing to rise Phoenix-like from the ashes ahead?

BIG WINNERS: GM and FoMoCo. Call it a home field advantage, but The General’s troops and The Blue Oval Boyz did the most to impress, launching the drop-dead gorgeous, thundering Chevrolet Corvette ZR-1 ; the luxe yet yeoman-like new Ford F-150 full-size pickup and the AMG-alike Cadillac CTS-V. Hail Mary passes they may be, but connect they did. (Yoda am I.)

BIG LOSERS: Chrysler and Toyota. Dodge launched their new Ram pickup amidst a gen-you-ine cattle drive outside the convention center. Indoors, the automaker’s displays were equally unfinished and disorganized. Toyota, the masters of organization, revealed nothing more exciting than a station-wagon-on-stilts. While the Camry-based Venza will sell in [non-cattle] droves, it oozed nothing in particular from every pore. 

BEST SHOW TREND: diesel. Honda announced its plans to put a four-cylinder clean diesel engine into their [unintentionally] stealthy Acura passenger cars, as of next year. GM took the wraps off a new low-compression clean-burning 2.9-liter oil burner— a potential game changer in a Cadillac CTS coupe, no less. Mercedes, BMW and Audi all announced upmarket oil burners. And Chrysler promised to put a V6 Cummins turbo diesel into their half-ton Ram pickups, after 2009.

WORST SHOW TREND: alternative propulsion. The 2008 North American International Auto Show was the latest venue for the world automotive ecology Olympics. Unfortunately, all the athletes were pumped-up on PR puffery, and no events were actually run. Like the engine-less Cadillac Provoq “hydrogen” concept car, the hype surrounding the efficacy and practicality of a range of alternative propulsion powerplants has obscured the truth of reasonable expectations and anything like a practical timeframe.

CUTTING-EDGE WINNER: Former Aston designer Henrik Fisker’s mob made a major impact with their oh-so-sexy Karma all-electric sports car. Fisker execs say they’ll beat Tesla Motors to market with the first all-electric production sports car. Words are cheap, although neither car is. In theory.

CUTTING-EDGE LOSER: Tesla. Tesla’s no-show at the North American International Auto Show is a major miscalculation; with TTAC-fed doubts about the company’s viability, Tesla needed to fly the flag for their Lotus Elise-based all-electric Roadster. Either the silicon start-up couldn’t afford to lease the COBO real estate, or they didn’t want to face uncomfortable questions from an increasingly impatient press corps and public, or, sensibly enough, they’re conserving dwindling financial resources for more profitable endeavors. Anyway you look at this, they lose.

MEDIA WINNER: Autoblog, Jalopnik et al. The so-called new media continued their rise to prominence. Web slingers wrote stories, edited photos and transmitted the results for near-immediate posting on the Web. With Wi-fi, they didn’t even have to leave the show floor to do so. When The Old e-Gray Lady (the New York Times online) broke multiple photo embargos the night before the first press day, it was abundantly clear that print was dead.  

MEDIA LOSER: buff books. The reports and photos from the North American International Auto Show hit the blogosphere within minutes. The buff books’ reports won’t show up in tin mailboxes for at least a month, more likely two. The old tech publications are clamoring to morph themselves into something more relevant by utilizing video and feeding their own web sites. One ink-stained Hungarian-looking scribe called “Chubba” trailed around behind me with a film crew. He pretended not to know who I was but followed me everywhere. Creepy.

SHORT TAKE WINNERS:
• Audi – Major buzz around the R8, and deservedly so.
• Ford Verve – IF only…
• Nissan – The GT-R is gonna be a HUGE hit

SHORT TAKE LOSERS:
• Chinese automakers – Relegated to the COBO basement, where they belong
• Buick – Their only inspiration came from China. How great is that?
• Mercury – Who? What? Where? No one. Nothing. Nowhere.
• Jaguar – Jag needs a homerun. The XF ain’t it.
• Pontiac – Why would anyone buy a G8 over a CTS?

Taken as a whole, the 2008 North American International Auto Show did little to suggest that major manufacturers have busted any moves to meet the twin challenges of recession and regulation. Those that are ready, are. Those that aren’t, aren’t. I read somewhere that Nero was a pretty good fiddle player. So is Detroit.

[For full TTAC Auto Show coverage, click here.]