In a previous Piston Slap, David Holzman and I discussed:
DH: Are old car reviews doomed to vastly underrate the cars relative to how they drove when new—unless they’ve recently been overhauled?
SM: Yes. I talked to the owner of the 1996 Explorer I reviewed, mentioning the correlation between a terrible ride and 13-year-old shocks. He’s less than thrilled with the idea, even though he hates the ride. So who in their right mind proactively replaces shocks on an old car?
And now, an update:
This Explorer got an upgrade from original Motorcraft shocks to a set of five (yes, five) new dampers from Bilstein. So what changed since the original review?
Assume for a horrifying second that you are the chairman of the board of one of the world’s largest auto companies. You also own large chunks of a smaller auto maker. Your executive assistant brings in a letter from one of the top managers of that smaller automaker. The letter says you broke the law, you hurt the company, and he may hold you personally liable for the damage. To the tune of, oh, several billion. Euros. What would you do? Right. Send down security with a moving box and have the guy escorted to the factory gates. Ferdinand Piech, chairman of the board of Volkswagen, supervisory board member of Porsche, and one of the largest owners of Porsche received such a letter from Porsche CEO Wendelin Wiedeking. The letter arrived a month ago. Wiedeking still has a job. But the letter has been leaked to the press. The day before Wiedeking’s day of reckoning.
The Süddeutsche Zeitung is in possession of a personal letter from Wiedeking to Piech, sent on May 13,2009. Your guess is as good as ours who revealed the reading matter. A day before the epistle was express-mailed, Piech had publicly called Wiedeking a loser. A few days later, Piech had offered Wiedeking a job after Volkswagen had done a reverse takeover and gobbled up Porsche: The job came with conditions. “He would have to step several rungs down the ladder. He would have to be demure,” said Piech. In the olden days, this would have been cause for a duel with pistols. It turned into dueling letters.
Wiedeking is still in charge of Porsche and is still trying to find the money to finance and finalize the takeover of Volkswagen by Porsche. “Apparently, Piech did not get support for firing Wiedeking,” musesDer Spiegelafter reading the Süddeutsche. The support for an execution of Wiedeking at Porsche must come from the other factions of the Porsche/Piech families ruling Porsche. So instead of firing Wiedeking, Piech fired a letter back and denied all allegations.
The obviously premeditated leak is yet another chapter in the power struggle for the control of Volkswagen and Porsche. Porsche is looking at a debt of €9 billion and cannot complete the takeover of VW. They applied for a €1.75 billion government-backed loan, but the application has not been decided. The Sheikh of Quatar is ready to buy 25 percent of Porsche, but he wants to have a say in the company also.
“Even a Qatari investment, or a loan from the government, cannot revitalize the project for taking full control of VW,” says the New York Times today, citing analysts. “This does not create a chance for Porsche to resume the takeover of VW,” said Daniel Schwarz, an automotive analyst at Commerzbank in Frankfurt. “That scenario does not exist anymore.”
Today, Friday, is a day of double reckoning for Porsche.
Today, Porsche presents the numbers for the first ten months of the 2008/2009 fiscal year. According to Reuters, “reported pretax profit at its core sports car business declined on the back of a sharp drop in vehicle sales and revenue in the first nine months of its fiscal year. Consolidated profit before tax would significantly rise, however, thanks to a considerable boost in earnings from cash-settled stock options that benefited from a high underlying share price in Volkswagen ordinaries.” It may be the last time.
Today, Friday, June 19, is triple witching hour in Germany. Most options Porsche holds on Volkswagen stock expire. Porsche either has to exercise them, which costs money, or they go poof and result in a big loss. Reuters predicts a “potentially volatile session for Volkswagen shares on Friday due to the expiry of options, index options and futures on the Eurex derivatives exchange.”
The leaked letter exchange was strategically timed.
GM is shutting down production of the Pontiac Vibe at the New United Motor Manufacturing, Inc. (NUMMI) plant in California. GM has sold some car or another based on the Corolla ever since they jointly opened the plant with Toyota. GM doesn’t need them to produce another small car, as they’re looking at plants in Michigan, Wisconsin and Tennessee for that. That’s the first dot. And away we go!
Toyota spent $1.3 billion to build and man a new plant in Blue Springs, Mississippi. Originally, Toyota Motor Manufacturing Mississippi (TMMS) was set to construct Highlanders. And then the SUV market crashed. As gas prices rose, ToMoCo couldn’t import enough fuel-sipping Priora to satisfy demand. In July 2008, they announced a change in plan. The Hospitality State facility would be converted to Priora production. And then gas prices cratered. As did the entire US new car market, including the Prius. With all excess capacity in other factories, Toyota’s mothballed the half-built Mississippi factory.
Then Toyota released the 2010 Prius. Despite the depressed global new car market worldwide demand for the model is strong. Toyota needs more manufacturing capacity to meet that demand. It’ll take a while to finish the on-off-on Mississippi manufacturing plant. Dot two.
Third dot: The new Prius shares some parts (such as underbody frame) with the Corolla. In fact, they could be built at the same facility. Rumors are flying that Toyota will add the Prius to NUMMI’s repertoire. It makes sense. NUMMI has the capacity to build Priora; all the high-tech parts they’d need will come from Japan to the west coast. Toyota would cut shipping costs considerably by parts close to their west coast port of entry.
Now here’s where it gets interesting.
GM and Toyota still jointly own NUMMI. GM’s historically sold a Toyota-based small car since they started the venture. Will Toyota build another? We’ve href=”https://www.thetruthaboutcars.com/toyota-to-gm-need-help-say-the-magic-word/”>reported that Toyota’s President Katsuaki Watanabe said, “If some talk about supporting GM comes up, we would like to consider it earnestly.”
It’s the same party line ToMoCo adopted back in ’05, when GM first acknowledged that it was kinda maybe heading for disaster. In fact, as we reported at the time, GM CEO Rick Wagoner flew to Tokyo and met with Toyota’s CEO. Although the substance of those talks was never revealed, it was widely speculated that Wagoner was exploring the possibility of licensing Toyota’s hybrid technology (if only).
Dot four.
New CAFE regulations are full of loopholes, but Government Motors has to do something to at least appear to be satisfying their high mileage provisions. They need to fulfill the “greener” part of their short-lived “Leaner, Greener, Faster, Smarter” reinvention campaign.
GM’s going to build the Cruze, their own small car, in Lordstown Ohio and Son of Aveo somewhere (where the tax breaks are easy). But their dance card at the hybrid car cotillion is empty. The General’s pulling the plug on their light hybrids (VUE, Aura and Malibu) and put the PHEV drivetrain for the Saturn VUE on hold (the model’s going bye-bye). The Hail Mary plug-in hybrid Volt has been conspicuously absent from the news and press releases lately. So there’s no telling what’s going on there. GM needs hybrid help to appease its new government overlords post haste.
Final dot.
So . . . what are the chances of Toyota building a small hybrid vehicle for GM when they gear-up to start Prius production at NUMMI? Connecting all the dots shows it would fill an important niche for GM, give them sorely-needed green creds and would improve capacity utilization at NUMMI.
“No way” you say? That’s exactly what they said about the idea of GM and Toyota cooperating on anything before NUMMI opened a quarter century ago. Stranger things have happened. Given the state of the auto industry, anything’s possible now.
The so-called “Cash for Clunkers” legislation demonstrates everything that’s wrong with a political process playing in the market arena. It’s legislation that will do little to improve car sales. But it will drive traffic to dealers—mostly credit bandits scurrying around trying to buy new cars they can’t really afford.
There is one fundamental issue which restricts the usefulness of either the House version or the Senate (Feinstein-sponsored eco-version) of the legislation. Simply put, many current owners of low-value vehicles are unlikely to possess the resources to acquire outright for cash or qualify for financing on a new vehicle. Such owners are typically used car buyers, not new car buyers, and are likely the second, third, or later owner of said vehicle.
The benefit of the voucher diminishes as the value of the new vehicle increases (on a percentage basis), so customers with larger passenger vehicles or trucks looking to buy new of comparable size receive less perceived value from the voucher.
And worse, the value of the voucher limits qualifying vehicles to those which have an actual cash value (ACV) below the voucher value and also have EPA combined mileage rating low enough to meet the required mileage threshold gain or the limit to qualify in the first place (18 mpg for passenger cars in HR2571 or 17 mpg for all classes in the Feinstein bill).
The combination of these two factors limits the pool of vehicles to mostly older large passenger cars, SUVs, and trucks. Smaller vehicles, such as more recent vintage Honda Civics and Toyota Corollas, would not qualify for vouchers, as their combined mileage rating exceeds the maximum threshold value already in either bill and are likely worth more than the voucher anyways.
One key provision is that the vehicle traded must be owned and insured by the current owner for at least one year and must be in “drivable condition.” This will limit the formation of a “secondary market” of voucher-eligible vehicles and hence will not raise the minimum value on clunkers sitting on dealer lots. (It cannot be assumed that everyone will be honest and it’s not far fetched to believe that there will be fraud on the ownership requirements.)
The one category of vehicles that will likely gain the most from this program: the compact truck segment, such as the Ford Ranger, Toyota Tacoma, Nissan Frontier, and, perhaps, the Chevy Colorado. The base models of these vehicles tend to be relatively inexpensive, with four-cylinder engines. Owners can maximize the value of the voucher on a percentage basis on a price basis, especially when manufacturer rebates and dealer discounts are included.
And the maximum voucher could be obtained by buyers coming out of larger engine passenger vehicles (such as an old Monte Carlo) trading for a new light truck to gain the bigger mileage boost to qualify for the biggest voucher. These buyers need transportation (and financial assistance) in order to get a new vehicle – and the type of vehicle may be less important to them.
While this “cash for clunkers” program appears to be successful in Germany, there are other factors at work there. For example, small cars are more prevalent in Europe than in the USA (due to energy costs). Then there’s the qualifying restriction; it’s simply based on vehicle age: nine years or older. And the fact that the rebate is equivalent to the German VAT paid on smaller mass-market cars. Many manufacturers also matched the government rebate, making lower cost vehicles even more affordable. [NB: larger vehicles, particularly in the luxury class, saw very little benefit from the program.]
The net benefit of this program will not necessarily come from sales of new vehicles, but rather a government-sponsored marketing effort (courtesy of the news media and dealer promotion) to drive traffic to new car dealers. Without a doubt, owners of low value vehicles of any type will consider exploring a new car purchase in response to the hype of vouchers providing a minimum value on their existing vehicle. But most of them probably can’t qualify for financing (and don’t have the cash anyways), so they’ll either leave disappointed or end up driving home in a newer used car.
All in all, don’t expect the proposed Cash4Clunkers legislation to create a big boost in U.S. new car sales. It’s just a promotion by the government to make it look like it’s a good thing for the environment and the economy. But what’s really scary: it foretells a future where the government will really start to modify our taste for fun, powerful (but less fuel efficient) vehicles through coercive taxes and penalties—while promoting Pelosi-cars through government giveaways.
The Senate should kill this wasteful legislation now before things really get crazy. May I suggest you call yours?
Sajeev, My oldest son has been bitten by automotive wanderlust. He is about to go off to college this fall and has decided that his grandfathers’ hand-me-down 4 cylinder 2000 Accord with only 30,000-ish miles is just not cool enough. Also, it needs new tires and a battery.
So he has cast his wondering eyes on a 5-speed 2000 VW Golf GLS 2.0L hatch listed in AutoTrader. It looks like a nice enough car but then I start thinking about VW’s reputation for reliability vs Honda, not to mention the size of the potential repair bills and I start to do what any normal parent would do—worry. Should I be worried? If the B&B here can’t convince him to stay with Honda is there anything I should have him be on the look out for trouble-wise on the Golf?
Per AutoTrader Ad, here are some noteworthy facts on the Golf:
The automotive retail landscape has been dramatically reshaped as both Chrysler and GM together have terminated almost 2,000 dealers as part of their on-going restructuring efforts. They were able to use the bankruptcy process to circumvent strong state franchise laws to shed dealers. At times there appeared to be no rhyme or reason to the selection process, leaving both dealers and consumers perplexed. Last week, as new details and documents surfaced on thetruthaboutcars.com on why certain GM dealership agreements would not be renewed in 2010, Automotive Traveler took an in-depth look at the closing process.
Over the past three weeks, both GM and Chrysler informed many of their dealers that they are now redundant as the restructure. While it was expected that many small rural dealers would be among those cut loose, in Chrysler’s case, many dealers that sold just one of their three (Chrysler, Dodge, and Jeep) brands were shut down. In some cases this was unexpected given that some dealerships were in major metro areas and boasted modern facilities. The reason given? That the company was “overdealered” meaning that there were too many dealers and it was impacting all dealers profitability.
In the case of the reasons why that certain Chrysler dealers were terminated, it appears that five criteria were evaluated.
Financial Viability
Dealership Upkeep and Appearance
Competing Brands at the Same Location
Number of Units Sold
Customer Satisfaction Index Scores
Chrysler dealers who might question why they were targeted for elimination probably need only answer the following seven questions:
Did you try and combine your store with a Dodge or Jeep dealer (or sell out to them) if a standalone dealership?
Did you update your showroom and service facility to the franchise-specific plan?
Did you consistently exceed your quota, and strive to increase your market share, even at the expense of gross margins?
Did you support the manufacturer, and exceed your stocking requirements by taking on extra inventory?
Are you financially viable, and consistently profitable (while trying not to hide any excess profits)?
If you have a competing brand, is it at least in a separate location/showroom/facility?
And are you selling more used product than new?
If the dealer answered NO to questions one thru six and YES to question seven, then each dealer can surmise why they were eliminated.
Over at GM, the problem is more complicated given that the Pontiac brand is being eliminated after GM’s recent efforts to build its Buick-GMC-Pontiac sales channel, and that GM is in the process of selling its Hummer, Saturn, and Saab brands. GM dealers will be evaluated based on four criteria to judge their viability. These criteria include:
Profitability
Capitalization
Customer service
Sales effectiveness.
To be part of the new, post-bankruptcy GM, these dealers have to perform well in all four categories.
For those dealers being eliminated, GM is offering some dealerships from $20,000 to $1 million to wind down their businesses over the next 17 months, the payment based on factors such as brands carried, regional sales rank, and current inventory.
But this payment comes with a cost; if the dealer accepts the payment, GM will not buy unsold inventory, the dealer must agree not to sue GM until their franchise agreement expires, the terminated dealers also will not be allowed to order new cars from GM, and they must stay in business until January, 2010.
And what might be the most onerous condition, a gag order that prohibits terminated dealers to talk to anyone other than its employees without GM’s permission.
Some GM dealers are not accepting the decision without a fight. Some are appealing individual decisions, seeking reinstatement, while others have gone public.
No one has been as public than Gretchen Carlson, host of “Fox and Friends” on the Fox News Channel. Her parent’s dealership, Main Motors in Anoka, Minnesota has been slated to be closed. On June 9 she appeared on “The Glenn Beck Program”, also on FNC, to plead their plight.
To respond, GM had Susan Docherty, its North America Vice President Buick-Pontiac-GMC appear on “Fox and Friends” on June 12 to respond to Ms. Carlson’s charges. The exchange wasn’t pretty, calling into question just how fair and balanced Ms. Carlson and Fox News Channel are, who along with the Fox Business Channel has taken a very vocal and pronounced anti-bailout stance with regard to the auto manufacturers, including saying that the selection of some dealership closings was politically motivated.
[For additional details, including seven supporting videos, read the entire report on Automotive Traveler]
Let’s get one thing straight: There are very few inanimate objects which inspire my personal distaste, contempt, and revulsion as much as the Toyota Prius does. It’s a sad, sick, suppository-shaped little plastic box which exists for the sole purpose of letting spoiled, faux-progressive Americans feel virtuous as they continue to consume the lion’s share of the world’s finite resources. I will go to my grave believing that the Japanese Government subsidized its development for the purposes of economic warfare on the United States, and that the Prius lost money for years in a way that no automotive nameplate that does not begin with “Aston” would consider even vaguely defensible. Sometimes, the Prius even kills its own assembly-line workers. In my perfect world, it would extend the same service to its smug, open-mouthed, emo-glasses-wearing, lane-blocking owners.
I could go on, but you get the point: I hate the car. And yet, when I read Jay Shoemaker’s infamous single-star review of the latest model, I cannot help but think that in his place, I would have given the blandmobile from Toyota City four stars . . . or, whisper it, five.
TTAC stands virtually alone among major automotive news sources in providing its reviewers carte blanche to review a vehicle as they see fit. The flip side to this is that the reviewer is understood to speak for himself, not for the site as a whole. The road tests in magazines like Car and Driver are intended to represent the opinion of that magazine, not that of Tony Swan or Patrick Bedard in particular, so the opinions of the individual writer are smothered beneath a leveling flow of groupthink. The reader is therefore reassured that Car and Driver conducts all its reviews using approximately the same standard, and that one may read individual reviews of competing products and obtain a useful comparison by doing so.
Bland consistency is the secret behind Ray Kroc’s billions and billions served, but it holds no sway on this website. Our reviewers judge cars by widely different standards. The new Mustang? I loved it, but Farago thinks it’s lousy! Our methodologies differ widely. Sajeev Mehta examines assembly quality, Robert considers market positioning, I recently took a drum-rear-braked Ford Focus to a public trackday and passed an Exige by cutting an entire corner on the track and showering the Hethel hearse with dirt and rocks. We’re all different and we’re all permitted to have our say.
With this in mind, I’d like to receive some guidance from TTAC readers as to how I rate cars, and if the other reviewers choose to take heed as well, that is up to them. From my reading of the comments surrounding Jay’s test, I have concluded that there are three major suggested rating methodologies:
1. Rate the car in accordance with how well it performs its particular intended mission. We rate the Prius on its efficiency, the Veyron on top speed, and the Sonata on how well it matches up to the Accord.
2. Take the core qualities of a car for granted and rate it on its ability to perform other tasks. We assume the Prius is efficient, so we judge it based on excitement or aesthetics. We know a Veyron is quick, so we rate it based on its usability.
3. Consider how the vehicle stands within the overall automotive marketplace and rate it accordingly, adjusting for price or not as you see fit.
Let me take those in reverse order. I’m not a fan of “overall rating”. Consider the Honda Civic. Compared to a BMW 335i, the Civic is a piece of garbage. Compared to an Elantra . . . not so much. Which comparison is more important? Nor do I like the idea of rigorously price-adjusting ratings, because it leads to comparison tests where the Infiniti G37 “beats” the aforementioned 335i despite being wholeheartedly inferior.
The second idea, advanced by several TTACers in the Prius-test comments, also leaves me a bit nervous. I don’t like the idea of rating a Lotus Elise on storage capacity. You could argue that most of the major magazines use #2 as their guide, which leads to universal praise for well-rounded cars like the Honda Accord. The Accord’s a great car, but for some people the Altima is better and for others the Camry would satisfy more, precisely because those two vehicles stray from the “all-rounder” idea to emphasize individual features.
Which leaves us with #1. That’s how I like to rate a car. The Mustang GT500 is a five-star car because it’s the best ponycar you can get, the Prius is probably a five-star car because no other hybrid delivers the unique features and experience to the same extent, and the BMW Z4 is not a five-star car because it falls short to the Boxster in all the ways that really matter.
What do you, the TTACer, think? I’ll read all the comments, attempt to figure out what the majority opinion is, and deliver my next review (the 2010 Ford Fusion SE Duratec six-speed) to your specifications.
Hello Sajeev, I’d like to ping your automotive wisdom with the following question. Soon I’ll be looking for a new car to replace my leased Corolla. I love power moonroofs (which my Corolla also has). My next car will be a long-term keeper, and even though I’d love to equip it with a roof orifice, I’m not sure about the longer-term reliability of power moonroofs. Are they known to start leaking, to require expensive repairs? Or is it better to buy a car without a moonroof and then have a manual sunroof installed; and would it void the car’s warranty?
I’d like to keep my next car until it falls apart — 10 years or longer. Thanks muchly for your time.
China is becoming the new America, while America is becoming the old China. Jack Perkowski thinks it’s happening right now. Jack is an Old China Hand and a colleague in the automotive parts business. He’s an American and a Yale graduate. Fifteen years ago, he came to China and started ASIMCO, an auto component manufacturing company. In January, Perkowski left the company. The global decline in the business didn’t spare ASIMCO. Perkowski is a true Lao Wai, which literally translates into “Old Foreigner” in Mandarin. From one of the first in China, we inherited a lot of his experience. Some is chronicled in Perkowski’s book Managing the Dragon, which made the bestseller lists. Most is regularly updated in Perkowski’s blog that goes by the same name. In a recent post, he left us some interesting thoughts. Some may find them revolting, even seditious.
During my time here, China has become the third largest economy in the world, the world’s largest market for cars, computers, cell phones and a host of other products, and the country has accumulated $2 trillion of foreign currency reserves. China is now the single largest investor in the United States, unthinkable in 1994 when China had less than $50 billion of reserves.
As the single largest creditor, is China worried about where the U.S. of A. are going? Perkowski sure thinks so:
Given all that has transpired, the leaders at Zhongnanhai must be scratching their heads, wondering what their counterparts in the United States are up to. It began with Enron, Worldcom, Tyco and a host of accounting scandals. In a flash, the financial statements of Chinese companies were just as believable and just as transparent, if not more so, than those of U.S. companies. Then it was Bear Stearns, Lehman, AIG, Bank of America, Freddie Mac, Fannie Mae, Citicorp and the meltdown of the U.S. financial industry. Hoping to learn how to develop its own financial system, China encouraged investments in its state-owned banks by leading U.S. players. Maybe they aren’t such good examples to follow after all?
While China is trying to divest itself from state-owned companies, what is China’s largest debtor doing? Just the opposite.
But the sharp left turn that the Obama Administration has taken since coming to power must really have China’s leaders wondering. Not just the banks, but now large industrial companies, are owned by the U.S. government, and the United States is doing what any government does when it owns companies—it meddles, and political, not economic, considerations are taking precedence.
The takeover of the car industry by the US government reminds Perkowski of the bad old days in China. The courts ignoring the law? Employment for the working masses trumps turning a profit? Where does one still find these egregious practices?
Rather than let the bankruptcy system work as it has over the years to restructure companies, billions of dollars, much of which will never be recovered, have been pumped into General Motors and Chrysler, two companies that represent less than 30 percent of the U.S. automobile market and have been losing market share to foreign-owned companies that now also happen to manufacture in the United States-all in the name of saving the jobs of the United Auto Workers, whose support played an important role in getting the current administration elected.
Central planners deciding the direction of the companies? Heads of state-owned enterprises serving at the pleasure of party bosses?
An administration-appointed car czar, not the company’s board of directors, has fired the General Motors chairman and CEO and installed a new CEO, president and chairman. General Motors is told what plants it cannot close and where its offices should be located. Barney Frank personally called the General Motors CEO to reverse a decision to close a GM distribution facility in his district, and President Obama himself assured Detroit’s mayor that GM’s headquarters would remain in Detroit, rather than move to a neighboring suburb. Undoubtedly, the Obama Administration and Congress will tell their management appointees what types of cars GM should produce. Toyota, Honda, Nissan, Hyundai and their U.S. workers must be delighted with this turn of events.
At least we can find solace in the fact that there still is justice in America. Perkowski is beginning to have his doubts.
As for the vaunted ‘rule of law’ that the United States has been known for, ask the GM and Chrysler secured bondholders what they think. And as for manufacturing statistics—Americans are being told that the administration will ‘save or create’ 600,000 jobs this summer, a statistic that the Wall Street Journal has labeled an ‘immeasurable metric.’
I there anything that doesn’t remind Perkowski of the times before Deng Xiaoping? Yes. China was never ruled by Russian Emperors, who were famous for mistreating their serfs:
A newly appointed pay czar (there are now more than 20 such ‘czars’ in Washington) will now review the compensation of the top 100 managers of any company that has received support from the government.
So what does Perkowski suggest?
Somewhere along the line, the United States picked up that socialist economic playbook that Deng Xiaoping was smart enough to throw away. Perhaps the U.S. should ‘follow Deng’ and go back to what got the United States, and now China, to where it is today?
Now is the time to clear out the cobwebs, dust off the servers, tidy up the code, and polish the site. The frenzy of breaking (bad) news, sales and takeovers, and flamewars has somewhat subsided and we take this time now to vet some ideas we’ve been kicking around.
First, are you, our loyal readers, satisfied with the number and time of postings? More specifically, do you prefer the way we do it now with a bunch of postings made early in the morning, a few an hour until around noon PST, and then a posting or three in the afternoon; or, would you prefer we schedule the posts to publish every hour throughout the day? Does the current method give you enough time to read the article and participate in the comments? Read More >
Good morning, class. Welcome to GM’s Deadly Sins 101. In this seminar we will review and analyze some of the most critical blunders GM made over the decades, focusing on the ill-conceived, unreliable, ugly, and just plain mediocre products that destroyed the company. I struggled mightily with the decision as to the first example, given all the boners available to me. But here it is, GM’s Deadly Sin #1: The 1986 Buick Riviera. Read More >
Recently we took our 2005 Murano with 75,000 miles on it into the mechanic for the 70k maintenance. It was making a bit more noise than we thought it should and the mechanic says from a cold start this morning it sound even worse. He says the oil stick did not register and he believes it is 2 qts down. We put in synthetic about 7k miles ago. He suggests while it is in ‘decent’ shape (after an oil change and oil treatment/flush) we should consider trading it in.
The feedback on Murano repair history that I’ve seen says they have the ability to drive for quite a few more miles than 75k. We had planned to keep it for at least a few more years but the mechanic says he believes we may be at risk of losing an engine in a few thousand miles.
This issue has boggled me from Day 1. I own a 2007 Honda Civic EX Sedan, with the 1.8 litre 4-cylinder, and the oh-so-wonderful Drive-By-Wire throttle system.
My issue is that it is LAZY. Lazy to rev that is. Also, at some points it appears to lose power for just a split second in the middle of a gear. Now at first I thought this was the result of an A/C compressor kicking on (I picked the car up in June 2007). But it has demonstrated this year round.
It doesn’t happen every time though. But it’s enough of an annoyance for me to bring it to the dealership. So my lovely Civic has been there a few times. They can’t figure it out. They’ve reflashed, and cleared the ECU, so that it will learn my driving habits all over again, etc however, it still happens. Can you, or anyone else explain to me how Honda can get this so wrong (And by comparison, a VW GTI with a DBW system can get it oh-so-right)? Can anyone suggest how I can get this remedied? It’s getting more and more of an annoyance. Especially since it IS (was) a new car. I’m not looking to replace the car, since I do plan on keeping it, so that is out of the question.
It was November 1989. After a long into-the-evening meeting with Volkswagen execs in Wolfsburg, after the usual after-meeting festivities and after a very short night, I sat groggily behind the wheel of my Audi V8 (as it was called at the time) and headed back to Düsseldorf. Little did I know that what happened that night would gain me the company of sixty near-naked women. Others would gain even more . . .
I planned to hit the Königslutter exit of the Hannover-Berlin Autobahn with the usual élan. That road was not well travelled. Königslutter was the last exit in the free West. Next stop: The Iron Curtain. The death strip. Built to keep East Germans in East Germany.
I intended to make a high speed right turn and go west. Next stop: Düsseldorf. Two hours and forty-five minutes on an empty Autobahn. (These days, six hours is not uncommon.)
I executed the turn. Then, I faced the unbelievable. Read More >
I had an interesting conversation with PCH101 about New GM’s governance. Like many observers, the TTAC commentator is not ready to dismiss The Presidential Task Force on Automobiles (PTFOA) out of hand. I, of course, am. Have done. Will do. But before I do (again), consider PCH101‘s logic. He credits the PTFOA for clearing out the deadwood: finally ridding the failed automaker of the troublesome man who guided the company on its final descent into bankruptcy. He also believes that the 25-member PTFOA is a better bet for GM than the original plan for federal oversight: a car czar. “I remember a study in B-School that concluded a committee of managers without any direct experience in an industry made more effective decisions than a single autocratic insider.” With all due respect, crap. And completely irrelevant.
What’s GM’s single largest problem? Uncompetitive vehicles? Yes, well, there is that. Dead brands? Sure. Too many dealers? Doesn’t help. But it’s executive torpor that’s the root cause of the automaker’s longstanding inability to take in more money than it spends. The automaker has far too much bureaucracy, and all of it’s deeply dysfunctional. Ipso facto.
In fact, GM’s management ethos is so obviously broken it’s become a PTFOA talking point. Despite President Obama’s semi-pledge to kinda keep his distance from GM’s [hand-picked] executive team, PTFOA jeffe Ron Bloom recently promised to tackle GM’s moribund culture in a non-interventionist way (presumably).
Good luck with that. Before we calculate the odds, let’s be clear about the problem.
The majority of GM’s executives don’t care about the customer. They may pay lip service to the people paying the bills (before the U.S. taxpayer stepped in). But their day-to-day decisions are not motivated by a desire to provide GM customers with the best possible products and services.
Their single, over-riding concern is . . . themselves. Their career. Every decision that GM’s suits make is made with an eye to protecting and (perhaps) extending their territory within the automaker’s byzantine structure. CYA is their modus operandi. “Yes” is the operative word.
No surprise there. That’s how they got where they are in the first place. Case in point: VP of sales and marketing for GM North America Mark LaNeve.
From 1981 to 1995, LaNeve worked his way up Cadillac’s executive ladder. When he assumed the General Manager’s job, LaNeve knew Caddy’s survival depended on remaining resolutely upmarket. “Young people should aspire to owning a Cadillac,” LaNeve said back in the day. “They shouldn’t be able to afford one.” And then LaNeve joined the corporate mothership. He did what had to do: “modify” his beliefs. Go along to get along. STFU. Entry-level Caddies arrived without debate or delay.
Actually, it’s worse than that. GM’s suits don’t even care about the company. Yes, even now. Especially now. If anything, Chapter 11 means they’re even LESS motivated than before. Think of it this way: if GM’s overlords screw the pooch (again), what are the feds going to do? Declare bankruptcy?
PCH101 believes the PTFOA will, eventually, clean house. Even if we accept the idea that all the president’s men kept a GM insider at the helm in order to fire him in favor of a genuine reformer who will eliminate and/or replace, say, 25 percent of GM’s upper management, the bigger picture still sucks.
“Hands-off” or not, the 25-member PTFOA adds another level of bureaucracy above the existing GM bureaucracy. If each PTFOA member fires off fifty emails a day, that’s 1,250 more internal comms per day. The PTFOA also has a staff. Meetings. Agendas. Targets. Reports. Memos. The federal quango is a shadow governing body for a company that needs less management, not more.
True story: New GM is inherently worse than old GM. And it’s going to get worse from here.
At the moment, Ron Bloom and Steve Ratter are running GM well. I freely admit that President Obama’s minions are outperforming GM’s previous administration. (Of course, Captain Kangaroo could do a better job than the last mob, and he’s dead.) If the PTFOA orders the night of the long knives at RenCen, if they clear the forest of deadwood, I’ll publicly acknowledge the appointees’ collective wisdom.
And then what? By the time the PTFOA’s new brooms fail to sweep GM to a rapid turnaround—a virtual impossibility given the depth of GM’s decay and the car biz’s timelines—Bloom and Rattner will be long gone. Leaving . . . what? Administrative kudzu.
If President Obama wanted to save GM, he should have let it fail. There’s only one way to change deeply-ingrained habits: pain. GM’s management will not change its slavish devotion to its fundamentally inefficient way of doing business until and unless it’s more painful for them to keep doing what they’re doing than to do something else.
By making bankruptcy painless for GM’s upper echelons, by adding complexity rather than removing it, the President has effectively sealed GM’s fate.
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