[Reprinted from Pravda.ru] It must be said, that like the breaking of a great dam, the American decent into Marxism is happening with breath taking speed, against the back drop of a passive, hapless sheeple, excuse me dear reader, I meant people.
True, the situation has been well prepared on and off for the past century, especially the past twenty years. The initial testing grounds was conducted upon our Holy Russia and a bloody test it was. But we Russians would not just roll over and give up our freedoms and our souls, no matter how much money Wall Street poured into the fists of the Marxists.
Those lessons were taken and used to properly prepare the American populace for the surrender of their freedoms and souls, to the whims of their elites and betters.
First, the population was dumbed down through a politicized and substandard education system based on pop culture, rather then the classics. Americans know more about their favorite TV dramas then the drama in DC that directly affects their lives. They care more for their “right” to choke down a McDonalds burger or a BurgerKing burger than for their constitutional rights. Then they turn around and lecture us about our rights and about our “democracy”. Pride blind the foolish.
Then their faith in God was destroyed, until their churches, all tens of thousands of different “branches and denominations” were for the most part little more then Sunday circuses and their televangelists and top protestant mega preachers were more then happy to sell out their souls and flocks to be on the “winning” side of one pseudo Marxist politician or another. Their flocks may complain, but when explained that they would be on the “winning” side, their flocks were ever so quick to reject Christ in hopes for earthly power. Even our Holy Orthodox churches are scandalously liberalized in America.
The final collapse has come with the election of Barack Obama. His speed in the past three months has been truly impressive. His spending and money printing has been a record setting, not just in America’s short history but in the world. If this keeps up for more then another year, and there is no sign that it will not, America at best will resemble the Wiemar Republic and at worst Zimbabwe.
These past two weeks have been the most breath taking of all. First came the announcement of a planned redesign of the American Byzantine tax system, by the very thieves who used it to bankroll their thefts, loses and swindles of hundreds of billions of dollars. These make our Russian oligarchs look little more then ordinary street thugs, in comparison. Yes, the Americans have beat our own thieves in the shear volumes. Should we congratulate them?
These men, of course, are not an elected panel but made up of appointees picked from the very financial oligarchs and their henchmen who are now gorging themselves on trillions of American dollars, in one bailout after another. They are also usurping the rights, duties and powers of the American congress (parliament). Again, congress has put up little more then a whimper to their masters.
Then came Barack Obama’s command that GM’s (General Motor) president step down from leadership of his company. That is correct, dear reader, in the land of “pure” free markets, the American president now has the power, the self given power, to fire CEOs and we can assume other employees of private companies, at will. Come hither, go dither, the centurion commands his minions.
So it should be no surprise, that the American president has followed this up with a “bold” move of declaring that he and another group of unelected, chosen stooges will now redesign the entire automotive industry and will even be the guarantee of automobile policies. I am sure that if given the chance, they would happily try and redesign it for the whole of the world, too. Prime Minister Putin, less then two months ago, warned Obama and UK’s Blair, not to follow the path to Marxism, it only leads to disaster. Apparently, even though we suffered 70 years of this Western sponsored horror show, we know nothing, as foolish, drunken Russians, so let our “wise” Anglo-Saxon fools find out the folly of their own pride.
Again, the American public has taken this with barely a whimper…but a “freeman” whimper.
So, should it be any surprise to discover that the Democratically controlled Congress of America is working on passing a new regulation that would give the American Treasury department the power to set “fair” maximum salaries, evaluate performance and control how private companies give out pay raises and bonuses? Senator Barney Franks, a social pervert basking in his homosexuality (of course, amongst the modern, enlightened American societal norm, as well as that of the general West, homosexuality is not only not a looked down upon life choice, but is often praised as a virtue) and his Marxist enlightenment, has led this effort. He stresses that this only affects companies that receive government monies, but it is retroactive and taken to a logical extreme, this would include any company or industry that has ever received a tax break or incentive.
The Russian owners of American companies and industries should look thoughtfully at this and the option of closing their facilities down and fleeing the land of the Red as fast as possible. In other words, divest while there is still value left.
The proud American will go down into his slavery with out a fight, beating his chest and proclaiming to the world, how free he really is. The world will only snicker.
Stanislav Mishin
Category: Editorials
Stewart writes:
The Jetta sludge issue had me wondering. I hyper-mile my 2003 Jetta TDI 1.9L which, of course, has a turbo. [Side note: if anyone wants to tell me what an idiot I am for mooching along at idle in 5th gear to get 70MPG, feel free to tell me why that’s bad. I am exquisitely sensitive to all the Type A drivers (going 15 MPH over, screeching to a halt at the next red light) and let them go by safely.] I change the oil every 5K miles with the recommended Castrol from the VW dealer. Here’s my question: I make my change just after a run of at least 20 miles and I use a suction pump to get the old oil out, a Pela PL-6000. I’m wondering if, by not draining the oil out the crank case plug, will I have sludge buildup in my Jetta?
How do you write an obituary for an entity that’s been dead for seventeen years? Like that high-school Biology frog-leg experiment, GM’s twitching since 1992 was due to externally administered stimuli. Yes, I would have much preferred to write GM’s obit in ’92. Back then, the guilty party was merely GM’s brain-dead management. It would have been easy just to rag on about all the lame cars they built. But it’s become a lot more complicated and uglier. Now we all have blood (and red ink) on our hands. And it’s not going to wash out easily.
While we rub on our damn spots, let’s refresh our short collective memory. In 1992, GM posted a $23.5 billion loss, coming off multi-billion dollar losses the year before. It was the culmination of GM’s most disastrous decade ever. Market share collapsed from 45 percent in 1980, to 34 percent in 1989. Share price was down 90 percent from its all-time (adjusted) peak of $358 in 1965. GM’s bonds lost their vaunted AAA rating. The whiff of bankruptcy was in the air. If only the plug had been pulled then. It would have spared us all hundreds of billions and untold agony, not to mention well over 250 General Motors Death Watches.
Up to ’92, it was pretty much all GM’s own (un)doing too, from Astre to John Z. DeLorean. Nobody else to blame. Well, mostly, anyway. Some of the “artificial stimulus” had already begun, in the form of 1981’s Japanese (not at all) Voluntary Export Restraints (VER) deal. Denial and the blame-game were high on GM’s agenda, and curbing Japanese imports was going to fix Detroit. It turned into a classic example of “be careful of what you wish for.”
The Japanese responded with higher prices, and reinvested the resulting outsized profits in Lexus and Marysville, Ohio, among others. Is that what the Motown boyz had in mind when they beggared Washington for relief? And who paid for it all? The consumer, of course. Japanese car prices jumped some 15 to 30 percent during the VER era; Detroit’s, not. Somebody was paying for the development costs of that Caddy-killing Lexus LS400.
The Lexus was overkill anyway; by 1985, the pathetically-shrunken Cadillac DeVille was just a mutated Chevy Celebrity. This self-inflicted damage was mortal, too. GM’s premium brands had been their money printing press since the 1920s. Reel in the consumer in with a cheap Chevy, but make the killing when they trade up.
GM could live with Ford or Plymouth getting into Chevy’s pants once in a while, as long as Mercury, Edsel, Lincoln, DeSoto and Chrysler kept their hands off their “golden girls.” Having managed to keep them chaste for decades, they proceed to royally fuck themselves with ugly look-alike dwarves in 1985. I could go on (and have), but need I say more to explain GM’s death as an auto-maker in 1992?
Going forward from 1992 is an oxymoron. Since the mid eighties, the domestic automobile industry, as well as much of the domestic economy, has been all too heavily influenced by government policy, or the lack of it. What might have seemed good for the US might have also seemed good for GM, but . . .
Let’s call the lack of political will to implement a steadily rising gas tax to curb demand and stimulate long-term investment in an appropriate (and stable) fleet mix of vehicles Exhibit A. Alan Greenspan’s repeated downward pressure on interest rates in the face of both the stock bubble of the late 90’s and the subsequent real estate bubble makes Exhibit B.
The explosion of the financial sector due to the low interest rates and the lack of regulation or enforcement is “C.” American’s eagerness to slurp up the resulting brew of over-leveraged mini-MacMansions and oversized SUV’s with which to make their forty-mile commute is Exhibit D.
The end result: an epic F.
This unsustainable potion of cheap gas and cheaper money created the Zombie Three, with GM at the head of the pack. Even during those boom SUV years, GM’s cost structure and low transaction prices on cars resulted in profits from vehicles that were dismal, at best. In a decent year, like 1996, GM’s North American operations had a 0.8 percent return. What profits GM booked during these past seventeen years were primarily from financing and whatever overseas operations were having a good run, for the moment.
Yet investors were still willing to pay $100/share for a company that couldn’t make a profit on a car. Artificial stimulus indeed.
Meanwhile, it’s no secret that Toyota and Honda were generating around 70 to 90 percent of their global profits out of the US market alone. By building cars and light trucks.
Reality’s last hope would have been C11 in 1992, restructure oppressive union contracts, and hire Roger Penske to vacuum “the tubes” from top to bottom. Oh, and a tax-stabilized price of gas. And a genuine, effective national health care policy. And a responsible financial industry. And a functioning regulatory system. And awake consumers. And . . . so much for wishful thinking.
The inconvenient truth: for decades, GM has not been an automaker, but a wealth and capital-destroying dragon. Some $200 billion dollars in equity has been wiped out. Throw in another $27 billion in debt gone tits-up, as well as “your” contribution of some $45 billion: well over a quarter trillion dollars up in smoke. Where’s Saint George when we need him?
There was a time when we just said goodbye or good riddance to our failed companies. Studebaker was once the biggest wagon maker in the land. No more. Now we’re incapable of killing GM, and it’s too late to genuinely revive it. Just think up some new (electric) stimulus to keep it twitching.
It’s a waste of time and energy to blame GM for anything it’s done, or not, since its real death in 1992. Rick Wagoner’s immutable face is just another mask in our national tragedy play. Even worse, he’s what we see when we look in our collective mirror. In Pogo’s immortal words: “We have met the enemy, and he is us.”
US SecTreas Timothy Geithner quickly got out of DC for the Monday curtain call of the artist now known as Government Motors. Geithner went as far as Beijing to distance himself from the performance. Keeping a distance didn’t mean keeping his mouth shut. From Chrysler and GM, “we want a quick, clean exit as soon as conditions permit,” Geithner told students at Peking University in Beijing. Reuters took notes. “We’re very optimistic these firms will emerge from restructuring without further government assistance.” Strangely, everybody shares his optimism . . .
Back home, Geithner’s subalterns at the Presidential Task Force on Automobiles (PTFOA) are digging in for the long haul. To paraphrase Richard Nixon, we’ll have the twenty-five member team (plus assistants) to kick around some more.
It’s not like they need the money; Bloomberg reports that PTFOA bureaucrat-in-chief Steve Rattner is worth some $188m. He’s in it to win it—now that he’s divested shares in Cerberus (Chrysler’s soon-to-ex-owners) and “sold guarantees of as much as $15 million on a credit-default swaps index tied to the secured debt of 100 companies, including General Motors Corp.’s senior secured loans, the filing shows.”
Reuters reports Steve-O will continue to earn his bankruptcy proof government pension “even if General Motors Corp and Chrysler LLC emerge swiftly from bankruptcy this summer.” That’s because “the Obama administration’s autos task force will stay in business—shifting to an investment manager role.” According to the principles laid out in Washington, the US government “will seek to dispose of its ownership stakes as soon as practicable.”
Define “practicable?”
Someone should. Not that the Obama administration isn’t trying. The Washington Post reports that following that infusion, the US Treasury “does not believe or anticipate that any additional assistance to GM will be required,” a senior administration official said Sunday night, calling the restructuring a ‘permanent’ solution.” Final answer?
According to Reuters, one of Geithners officials “declined to project when this would be or how much of the $50 billion in aid extended to GM will be recouped. The restructuring plan was aimed at ‘maximizing taxpayer proceeds’ by ensuring that GM could be profitable even if conditions in the industry remain difficult for years to come.”
Not realizing how deep the foot was in his mouth, Geithner went on to reassure the students and the Chinese government that China’s huge holdings of dollar assets are safe and that he has deep faith in a strong US currency.
“Chinese assets are very safe,” declared Geithner at the Beijing University, where he studied Chinese in 1982.
This time, loud laughter erupted from the student audience. They clearly didn’t buy this one. On the first day of Geithner’s visit to China, China Daily reported that seventeen out of 23 economists in China said they deemed the country’s vast holdings of US bonds “risky.” China Daily is a well-written, and occasionally entertaining government publication. Ever so politely, Geithner is being told that the Chinese government doesn’t share his convictions.
The market didn’t buy Geithner’s faith-based valuations either. The same day he praised the strong dollar in Beijing, the greenback plummeted against world currencies. At the time of this typing, one Euro buys $1.42. The dollar hasn’t been so cheap since last December.
As China sees its dollars getting ravaged by consumption with a different meaning (pulmonary phthisis), Geithner treaded carefully when it came to the Chinese currency. All he said was that it would be nice if China would “continue progress toward a more flexible exchange rate regime.” That remark was ignored as politely as it was made.
Meanwhile, Geithner tries not to be reminded of his major achievement when he had studied in Beijing. He helped organize an international badminton league among his fellow Beijing students, which included participants from Sierra Leone, Iran and North Korea, as the website of his alma mater can’t help to note.
Whether or not Chrysler and GM’s future (or lack thereof) forms a lasting part of Tim Geithner’s legacy is not in doubt. The question: what sort of reputation will be “enjoy?” Will his intervention make things better or worse? The early signals aren’t good. But they never are. And May’s American sales results are headed our way on the same day as GM’s filing. As the old joke goes, it’s always darkest before total black.
Then again, as Market Watch reminds us, “even if all 120,000 GM workers lost their jobs tomorrow, it’d be less than the daily average of 156,000 jobs that have been lost over the past three months.”
Further, “The lost production at Chrysler and GM will reduce gross domestic product by about 0.7 percentage points in the second quarter, not a ‘dramatic’ effect, said Abiel Reinhart, an economist for JPMorgan Chase Bank. Falling auto production cut 1.4 percentage points in the first quarter.'”
So, no matter what happens at Chrysler or GM, Geithner can always claim that a sinking tide lowers all boats. How great is that?
The mainstream media tends to fumble the metaphorical football on the symbolic goal line. With fewer than twenty-four hours left before General Motors files for Chapter 11, the MSM is set to go back, Jack, and do it again. Instead of excoriating GM’s management for not taking in more money than they spent, they’re parsing the American automaker’s bankruptcy as a “sign of the times.” Leading this electronic charge of the heat without light brigade: P. J. O’Rourke. Writing for the Wall Street Journal, O’Rourke paints GM’s dissolution as confirmation that America’s love affair with the automobile is, finally, dead. Rubbish.
Quick digression: Yesterday, I was looking for something to healthy to eat at Six Flags New England. As you might imagine, I’d have had better luck trying to win an enormous Tweety Bird by tossing small plastic rings at the necks of custom-made, ring-aversive milk jugs. As I consumed a greasy hot dog on a butter infused bun, I thought, well, that’s the way it is.
If these teeming throngs wanted a healthy salad or a chilled fruit cup, Six Flags would sell them. The vast majority of their coaster-lovin’ customers want fried foods and sugary drinks. Six Flags has a business to run. So they give their customers what they want. Tough luck for me. The same inescapable economic logic applies to the manufacturers of P. J. O’Rourke’s diss-missed automotive “appliances.”
Contrary to the prosaic pistonhead’s rant, no one forced Americans out of their charismatic, high horsepower barges into boring and bland vehicles. Truth be told, the average consumer wanted personal transportation that they didn’t have to think about it. The automakers who best provided these vehicles thrived. The ones who could not do so, both consistently and profitably, did not.
It’s one of those ipso facto deals. If American car buyers didn’t place reliability above all, they’d still be driving union-built be-finned rust buckets that required constant mechanical attention. The fact that Toyota, Honda, Nissan and Hyundai are solvent, while GM is not, is a simple reflection of the transplanted automakers’ ability to give the people what they want.
Never mind the bailout or O’Rourke’s pining for more “adventurous” times. The free market has spoken. GM must die.
Was this desire for aesthetically neutral four-wheeled appliances nurture (roadside stranding, lousy dealer service, inconvenience and expense) or nature (if I wanted to be a mechanic I’d be one)?
O’Rourke blames suburban ennui (i.e., car as cupholder) and “busybodies of the environmentalist, new urbanist, utopian communitarian ilk.” He bemoans the end of the legacy of the swaggering, charisma-loving “romantic fools” who created America’s automotive giants. Yes, well, it was these self-same car guys that condemned GM to its ultimate fate as a tax-sucking zombie.
Former GM CFO and ex-CEO Rick Wagoner is [rightly] blamed for pissing away billions on ill-advised acquisitions. He merits condemnation for refusing to man-up and declare bankruptcy when the company could have done so under its own steam. And he deserves his place in infamy for handing the keys to the executive washroom to the federal government. Still, ultimately, the beancounters didn’t kill GM. The car guys did.
The car guys failed to commit the company to designing and building the small range of bland, reliable, competitive, cost-effective automotive products it needed to survive. They were drunk on pickups. High (and mighty) on SUVs. When it came to more pedestrian metal, GM’s senior (i.e., divisional) car guys threw whatever they had against the wall to see what would stick. Not much did, and they didn’t care.
Don’t tell me that Wagoner and his predecessors tied the car guys’ hands behind their backs, forcing them to accept badge-engineered mediocrity. They were happy enough to go along for the ride. And why not? They were hugely compensated cogs in a corporate culture where failure was impossible, gorging on unimaginable riches simply for keeping the status quo. Speaking of which . . .
It should never be forgotten that Car Czar Bob Lutz squandered GM’s last remaining chance at a genuine, product-led turnaround. Lutz doubled-down on a half-assed redesign of GM’s trucks, imported sales stinkers and commissioned poorly-developed niche-mobiles without a hope in hell of mass success. Lutz’ highly-touted Chevrolet Malibu was a singular vehicle; it was also too little too late.
Here’s the funny, horrible thing: you can hear echoes of Bob Lutz in O’Rourke’s paradise lost essay. Like Lutz, O’Rourke believes that American car culture is practically dead. Both men mistake the end of a certain kind of enthusiasm—their own—for a wider malaise. They don’t understand that automotive enthusiasts will always be a relatively insignificant minority of the American public; tens of millions of motorists want cheap, reliable, comfortable, practical, safe, not-too-thirsty, not-ugly transportation.
No one’s asking P. J. O’Rourke to respect appliance drivers. But GM’s inability to do so was, in the final analysis, the death of them.
For more than ten years, every word a certain top executive of Volkswagen uttered in public was pure BS. I wrote his speeches. I wrote articles under his name. I even ghostwrote a book for him. I studied his mannerisms, his way of thinking and talking. He slowly but surely slipped into the role for which I wrote the script. He’s retired now but still a sought-after speaker on the conference circuit.
He liked to live and work on the edge, and I gladly walked him there. We had a strange symbiotic relationship. His trust in me bordered on the obscene. Even before major strategy announcements, his brief for the speech usually amounted to: “You know what to write.” He rarely did read the speech before giving it. He always delivered it with great aplomb and usually to thundering applause. I could put practically any word into his mouth. Power that had to be used wisely. Read More >
It was a long night again. Not as long as the disastrous Wednesday/Thursday meeting. And it didn’t end in invectives. At 2:15 in the morning, Finance Minister Peer Steinbrück stepped outside Chancellor Angela Merkel’s offices and reported: “I can tell you that a deal has been reached.” If you looked hard enough, you could see holy white smoke rising into Berlin’s night sky.
The German government got most of what they wanted. They got their partner, Magna; they got someone who brings expertise and money (provided by Russia’s Sberbank); and they got their trustee model. Until the last minute, GM’s new overlords in D.C. wanted to avoid that one like another bridge too far. They lost. This paved the way to bridge financing for Opel worth $2.1 billion. The lights will stay on in Rüsselsheim – for now.
Siegfried Wolf, co-chief executive of Magna, cautioned there are still details to be ironed out. A detail such as a contract with GM and its new owners. “In five weeks’ time we should have the formal signing of the contract,” Wolf said. Whoever did even the most simple M&A with a US entity knows that Wolf is an optimist. There’s an army of devils lurking in thickets of details. More “abrasive” negotiations are expected from a government-owned GM. That deal is far from closed.
Steinbrück said US Treasury representatives at the meeting endorsed the agreement. And he graciously abstained from making any new remarks about the qualifications of the Treasury reps. But Berlin is still grumpy about the old hat tactics of sending a good-for nothing delegate to humiliate the other side.
Berlin’s counter: Put a Heckler & Koch UMP to the other side’s hard heads and threaten Konkurs (bankruptcy) by Wednesday. “That created some movement on the American side,” reports Der Spiegel. Just to make sure that no more stupid junior-staffer-tricks are played, Chancellor Merkel had a transatlantic phone discussion with her American colleague Obama on Friday afternoon – principal to principal. And next time troop strength in Afghanistan is on the agenda, Berlin will send a descendant of Karl Valentin.
Friday evening’s discussions, led by Chancellor Angela Merkel, were “conflict laden,” Der Spiegel learned. Economy minister Freiherr von und zu Guttenberg (the Guttenberg bible carries the name of his family) favored a cleaner bankruptcy, recommended by his advisers and most German economists. He thought – still thinks – that the whole rescue operation is fallacious risky business. Von und zu even offered his resignation. Angela talked him out of it, and in the end, political expediency trumped sound reasoning. Why should it be different this time.
Under the new deal, GM and Russia’s Sberbank will — most likely, pending a written contract — hold 35 percent each in a new GM Europe, consisting mainly of Opel and Vauxhall. Magna will get 20 percent, the Opel workers will get 10. Russia’s automaker GAZ will get no shares—they will act as some kind of a strategic partner, at the pleasure or displeasure of Tovarich Putin.
The $2.1 billion won’t be the last note the German government will have to sign. For the next five years, Berlin has committed to loan guarantees worth $6.3 billion. That’s it . . . for the moment.
GM’s Carl-Peter Forster said that “currently” there are no additional monetary demands on the part of GM. How nice.
As for the plants and factories, Magna’s Wolf said that they want to keep all, and as many jobs as possible—in Germany. There was talk about job reductions of about 2,500, achievable through natural attrition or “the biological solution,” as the expression goes in Germany.
Not a word was said about the plants and jobs elsewhere in Europe. Probably part of the details that need to be ironed out. The Guardian is already worried that the Vauxhall van production could shift to Russia’s GAZ. But if Lord Mandelson puts pounds on the table instead of just pounding the table, the fix could be in on that one also. Gotta pay to play.
Compared to the $105 billion that have already been poured down various drains stateside (and the pouring continues, take from the poor, give to the rich), the sums involved in Europe are benign – for now.
Remember: All there is is a memo. They haven’t even begun writing a contract. Under the best of circumstances, getting a deal done with so many parties is hard enough. If nothing is signed, sealed and delivered by 9/27/2009 – election day in Germany – Opel is dead.
Malcolm “Call Me Malcolm” Bricklin and I had our little chin wag this morning. As expected, the serial entrepreneur dominated the initial conversation. Less predictably, Bricklin began by bludgeoning me with Google-sourced biographical data. “I know about the Subaru [flying vagina] thing,” Bricklin pronounced. “You’ve got balls. I assume you’re not just saying all this stuff to be controversial.” After admitting his own insanity, Bricklin started recounting the entire history of the Yugo. His no-word-allowed-in-edgewise tale included the Cadillac Allante’s inhibiting effect on X1/9 production and Henry Kissinger’s contribution to the car that launched a thousand jokes. At some point, I interrupted Bricklin to ask about his latest venture: hydrogen. Turns out I got it wrong. Bricklin isn’t proposing a societal switch to hydrogen fuel. He’s got one of those 100mpg carburetor things. Only his creates “hydrogen-on-demand.”
Bricklin’s latest, perhaps last baby: a 4″ X 6″ X 8″ box that bolts onto an internal combustion engine, turns water into hydrogen and squirts it in with the gas. Bricklin claims the technology will increase ANY engine’s mileage by 50 to 100 percent. He also says Visionary Vehicles has licked the three problems that have prevented hydrogen-on-demand from being hydrogen-in-demand: overheating, blowing out the engine’s O2 sensors and corrosion of the stainless steel housing unit.
So, specifics? Nope. No demos. No names of scientists or companies who’ve worked on the device. No link to the company that’s supposedly field-tested the system. Nada. “We’ll have a car to show the public in 90 days, Bricklin promised. And that’s it.
Note: car. Not device. (Although, ever the salesman, Bricklin tried to convince me to fit my Odyssey with his “bumblebee”.)
While you and I might think that developing and licensing a miracle mpg generator would be enough work in the current economic climate, Bricklin has bigger plans. He wants to buy the output of one otherwise shuttered GM and one wanna-be defunct Chrysler plant, equip their vehicles with his hydrogen-on-demand system, tweak ’em a bit, and sell them to GM and Chrysler dealers as a “Visionary GM” and “Visionary Chrysler” products. “Like a Shelby Cobra,” Bricklin suggests.
Details, schmetails. Bricklin couldn’t care less which automotive models get the gizmo and wear the company badge. “I’ll let the dealers decide,” he insists.
Meanwhile and in any case, he’s got his eyes on the prize: the $25 billion Department of Energy retooling loans. You know, the loans for building more fuel efficient vehicles that were, at one time, the be all end all of the feds’ Motown meltdown bailout billions. Bricklin reckons the DOE money will pave the way for his visionary Visionary Vehicles.
Mind you, that doesn’t make Bricklin a bailout booster. When I tell him about the Small Business Administration’s new dealer floorplanning guarantees, the automotive Maverick goes ballistic.
“Holy Crap! How the hell did we ever come to this?” Bricklin demands, rhetorically. “All this bailout money is crazy. I never thought this would happen. Never.”
Nor, apparently, did Bricklin foresee that China’s Chery would screw him on his deal to import inexpensive, Chinese made plug-in hybrid electric vehicles into the US market. “We had $200 million set aside for the project,” Bricklin says. “We were all set to import the cars by ’07. Then Chery went around us and cut a deal with Chrysler for $275 million. I guess that didn’t work out so well.”
On the other hand, “This complete stupidity is the only reason something like my hydrogen-on-demand system will ever be considered.”
Clearly, Bricklin likes to believe that everything happens for a reason. His current media campaign reflects this philosophy. He wants the world to consider his abortive, eponymous Canadian car factory and his recent Chinese misadventure as pre-ordained events, preparing him for this, his life’s crowning achievement. He really believes he can fix the “aura of a scam” surrounding hydrogen-on-demand devices (not to mention the devices themselves) and realize the country’s fuel-saving dreams.
“We already have a working prototype,” Bricklin asserts. “We’ve got it down to the size of a coffee cup.”
Bricklin also thinks the timing is right. “It’s easier to start a car company these days. With the majors on the ropes and the technology changing. Companies like Tesla and Fisker are going to be around for a long time.”
With Malcolm Bricklin’s history of ups and (a lot of) downs, the septuagenarian’s indefatigable spirit comes as no surprise. What I’d like to know is what lies beneath Bricklin’s irrepressible dreams of brand building. Is ego all, or is Malcolm Bricklin honestly trying to make the world a better place? If so, well, good luck with that.
Frank Williams, former TTAC Managing Editor and resident snark-whiz, writes:
Oh Great Guru of the Gearbox, perhaps you can honor me with your wise words of wisdom concerning my ’99 Chevy Tahoe. It has the 5.7L engine and about 123K on the clock. At speeds above 50 mph, it surges when accelerating. This happens whether my foot is on the pedal or the cruise control is engaged. It’s almost like someone’s goosing the throttle and you can see the tach jump back and forth over a 2-400 RPM range when it happens. I use a Tier 1 gas in it and I’ve tried the easy stuff like fuel treatment, fuel injector cleaner and cleaning the MAS. So what should I look for now?
Today, Berlin will re-attempt to save Opel after the disastrous Wednesday night / Thursday morning confab. From most accounts, that meeting was a remake of The Three Stooges, with the actors sent by central casting in Washington and Detroit. Berlin is still fuming about the “impertinence” (finance Minister Peer Steinbrück) of the junior Treasury staffer who demanded an extra $415 million more in short-term cash, above the bridge financing of $2.1 billion Berlin had been ready to sign that night. They also are still grumpy about being lied to, or handed “information with a short half-life” as the finance minister put it ever so politely.
Still smarting from the public flogging the German ministers administered after the meeting, GM is in heavy backpedaling mode. It’s all a big misunderstanding, GM CEO Fritz Henderson told Bloomberg. Fritz should have gotten his derriere over to Berlin in the first place, preferably with PTFOA member Ron Bloom alongside.
When the Germans found out during Wednesday night that the Treasury staffer was absolutely useless, they established a quick videoconference with Bloom, desperate for someone who makes at least a bit of sense. To be sure, Germany’s SecState Steinmeier called his colleague Hillary Clinton for help. For what it’s worth, Hillary offered her “utmost support.”
Back to Henderson: Fritz says GM didn’t ask for additional funding for its Opel unit from the German government. Das ist ein Mißverständnis. GM’s request for a $2.1 billion bridge loan remains unchanged. GM just needs the money a bit faster: $630 million upfront. The German government had thought the immediate needs were $140 million, Fritz explained. “Any confusion that was caused by this we take responsibility for,” Henderson says with as much contrition he can muster.
That will go down just swimmingly in Berlin. They were already confused that night in Berlin, because numbers kept changing; some doubted whether the US delegation knew the difference between dollars and euros. Now, it’s $630 million instead of the $415 million that made the Germans hurl carefully crafted invectives westward ho. Everybody: On your knees and pray that nobody reads Bloomberg in Berlin.
Henderson tells the sob story that all GM is doing is try to “protect its European operations, including Germany-based Opel, before a US government-imposed June 1 deadline to restructure or file for bankruptcy.” We’ll see tonight how much sympathy he will get for that one.
One participant of the Wednesday meeting already picked up his ball and went home, to Torino. Fiat’s Sergio Marchionne said he will not make any more concessions, and he will not take part in the second round of meetings tonight, and he did not get full disclosure of the Opel books, and he’s not willing to take on any additional risks. Arrivederla, signora e signori! The other part of the truth is that someone on the inside had leaked that “Fiat is out,” as Der Spiegel reports.
Magna is just about to get up and leave also: Since 6 a.m. (local), Magna has been negotiating with Forster et al. in the Berlin Hotel Adlon, right across from the Brandenburger Tor. Forster must not have talked to the contrite Henderson. The meeting isn’t going anywhere.
Not having learned anything from Wednesday night, GM “is constantly making new demands” BILD Zeitung was told. Yesterday, Magna was ready to help with the $415 million bone of contention. Now they are mad as hell, and are close to saying “Jetzt reicht’s” (Enough is enough.). “They are ready to get up and leave,” BILD reports.
With the negotiations in increasing disarray, a bankruptcy of Opel gets ever more likely. The Frankfurter Allgemeine Zeitung reports that Opel has hired insolvency expert Jobst Wellensiek, along with the Clifford Chance lawfirm, which is working on a bankruptcy package to file with the court. Even chancellor Angela Merkel, who so far had taken the presidential high road, now doesn’t want to rule out an Opel bankruptcy, reports Der Spiegel.
It may be the cheaper solution all around. Germany’s economy department calculated that a shuttered Opel would cost the government €1.1 billion—assuming that all 25,000 workers will remain unemployed and find no new jobs (a nuclear winter scenario). Total government costs for an alive Opel: €4.5 billion under the Magna model, €6 billion if Fiat gets it. Germany’s other car manufacturers would be glad to take up the slack.
GM and Magna have until 2p.m. GMT to agree or disagree on a deal. If they agree, the German government will probably accept the deal without much fuss, says the FAZ. If there’s no deal, then the meeting tonight will be short. The bankruptcy of Opel shall be blamed on the ugly Americans, and Germany will go back to more important things. Who will win the fall elections?
Don’t touch that dial . . .
TTAC commentator jpcavanaugh writes:
My mother is in her mid 70s. Of course, she drives a 2006 Buick LaCrosse with about 10k miles. It is the first GM car in our family since the 1970s. She planned to remain a loyal Ford customer for life after 20 happy years with a pair of Crown Vics, but she won the Buick in GM’s last Hot Button contest.
I recently learned of this stuff called DexCool that is the factory-fill radiator coolant. From what I have read, I do not much care for this stuff. If it were my car, I would drive quickly to my independent mechanic and flush the system with the old-fashioned green stuff. So what do I tell mom to do? The choices, as I see them, are (in order from my least to most favorite ideas):
The Associated Press called it: GM is set to enter popular parlance as “Government Motors.” When the automaker files for Chapter 11, the nickname will stick, as the debate over GM’s future centers on whether or not the United States government should own a commercial enterprise. To which the only possible answer is no. It was no back when President Bush over-ruled Congress and authorized the first multi-billion dollar “loan.” It’s no now, as the feds prepare to stump-up another $20 billion dollars to keep GM in business. There are lots of reasons why “new” GM is a bad idea. But here’s the most important impediment: Government Motors doesn’t have the vehicles it needs to survive.
Let’s assume “good” GM lowers its cost base to transplant levels and single-out the models that could give the post-C11 automaker a fighting chance. We’ll combine objective information (last month’s sales data) and some subjective analysis (the enthusiast’s perspective).
Although we’ve long argued that Chevrolet and Cadillac are the only GM brands worth saving, that’s not how Government Motors will roll. So we need to identify potential money spinners lingering within Buick, Cadillac, Chevrolet and GMC.
Buick is a lost cause. The “take a look at me now” brand stands for nothing, save God’s waiting room on wheels. In April, the LaCrosse and Lucerne sedans combined generated 1481 sales. That’s more than the Enclave (5,194 vs. 3,731), but less than Toyota Tacoma sales (8,925 vs. 9,027). I’m no fan of the Enclave’s exterior, but we’ve got to keep something. The Enclave stays.
There’s no nice way to put this: Cadillac is another dead brand walking. Last month, the “standard of the world” also accounted or less sales than Ye Olde ToMoCo Taco. Sales of all eight Caddy models combined clocked-in at just 8,337 units. Caddy has some new models in the pipeline, but c’mon. CTS Sportswagon? SRX replacement? While waiting for a flagship, the CTS is the only Cadillac vehicle worth saving, in terms of product excellence and sales (3,876).
GM’s volume brand is looking decidedly lackluster. The Impala topped Chevy’s sales chart in April at 17,532 units. The Malibu and Cobalt are next up, at 14,665 and 10,627 sales respectively. So, despite the fact that the Impala is a low-profit fleet queen and the Cobalt’s a POS, we’ll keep the old girl, the new ‘Bu and the crap ‘Balt. We’ll also hang onto the Camaro. Corvette? If you must. Volt? Cruze? Equinox? More pie-in-the-sky from America’s master BS baker.
Chevy trucks are still where the money is. Incentives be damned; 26,437 Silverado pickup trucks moved off the lots in April. I’m also liking the Traverse (8,204). By [literally] the same token, GMC should keep the badge-engineered Sierra (8,273) and Acadia (4,764), and stay the course with the Tahoe/Suburban twins (12,586 combined).
And there you have it: one Buick, one Cadillac, five Chevy cars, two Chevy trucks and three GMC trucks. Your list may differ here and there, but I reckon these are the eleven vehicles upon which taxpayers will risk at least $40 billion dollars. Which would be OK, if that was the long and short of it. But it isn’t. In fact, it can’t be.
As the New York Times recently asserted (welcome!), we can blame GM’s sclerotic corporate culture for their abject failure to create a complete line of compelling/profitable vehicles. The idea that the United States government will reform GM’s way of being and reverse the curse is completely preposterous. It’s like asking a cocaine dealer to sponsor a crack addict.
Initially, the Chinese walls separating Government Motors’ management from its political masters will prevent excessive tinkering. But there’s no way GM can insulate itself from “undue” political influence. Not when the feds are both the automaker’s controlling stockholder AND its main lender. And certainly not when there are so many GM “stakeholders” ready, willing and able to play political hardball with GM’s new owners.
Why wouldn’t they? The bottom line is that there won’t be a bottom line. The Obama administration may genuinely want to create and then sell off a profitable GM but it’s under no obligation to do so. To wit: there’s no deadline for returning taxpayer’s money. Even if a reasonable turnaround strategy emerges—complete with performance-based reality checks—the new management team is destined to fall afoul of institutional apathy. I mean, we all know how many government-sponsored projects come in on time and/or under budget . . .
Think of it this way: the above list of cars GM needs to keep AND cull to survive presumes that Government Motors’ new overlords will ignore the blowback from closing factories in any given country, state or congressional district. That’s simply not realistic. If the survival of federally-funded weapons programs depend on their sponsors’ political pull as much the systems’ efficacy, why would we expect anything less (or more) from GM’s lineup?
To paraphrase Lowell George, GM’s been down—but not like this before.
John writes:
Sajeev, a buddy at work paid 26k for a 2006 530ix with 39,000 miles. The seller is a pretty, late 20s heiress who had a new Bentley in the driveway. She wanted 30k but took the cash. My buddy does not know anything about working on cars and hopes that it does not break before 150,000 mile like his parents old 5 series. He left message at local dealer asking about cost of extended warranty. They didn’t call back.
I tell him to go there in person, ask, then offer 2/3 and see what they say for factory CPO deal. Don’t take other than factory warranty – BMW as counter party. He thinks maybe not since its only two years left with any extended warranty, saying “so what, tires wear out, right?”
I say, “Yes. And heads warp and trannies stop shifting too.”
[This editorial was sent to us by Charley Territo from the Alliance of Automobile Manufacturers.] For the past eight years, a group that represents aftermarket parts suppliers has lobbied in Congress and state houses across the country for legislation that would give them free access to the intellectual property of automakers. Automakers spend more on research and development than any other industry. The proponents of this legislation can’t keep up. Their hope is that passage of Right to Repair would cut down on the costs and time needed to develop aftermarket parts to compete with OEMs. In practice, this legislation would do nothing to address the problems the CARE coalition says exist. It is a solution in search of a problem.
Ironically, ALLDATA, one of the largest of these third party providers of service and repair information, is a wholly-owned subsidiary of AutoZone, which is a major funder of the coalition in support of so-called Right to Repair legislation. Either the Automotive Aftermarket Industry Association is misstating a public policy position or ALLDATA is misrepresenting the nature of its product.
The information necessary to service and repair motor vehicles is widely available to all segments of the nation’s service and repair industry. In 2002, automobile manufacturers and the Automotive Service Association signed a broad industry agreement to ensure the general availability of service information, tools, and training. This industry agreement utilizes the National Automotive Service Task Force (NASTF), a broadly representative voluntary organization designed to resolve any availability concerns that may arise.
In 2007, NASTF reviewed a mere 48 service information requests out of more than 500 million automotive service and repair events. Of those 48 requests—some of which were duplicates—all but one was resolved readily by the vehicle manufacturers involved. We believe NASTF has and will continue to serve as an important organization for the service and repair industry.
Congressional support for the so-called “Right to Repair Act” has diminished as this voluntary agreement has been implemented. A few weeks ago, the legislation was re-introduced with just two cosponsors, down from 177 just a few years ago. Furthermore, in 2007 the Federal Trade Commission reported to Congress that it had received no complaints from independent repairers or anyone else about this issue. Unfortunately that hasn’t stopped the CARE coalition from continuing to scour the country looking for a sympathetic legislature to intervene on their behalf.
Today’s automotive engineers are using computers in innovative ways to produce even safer and cleaner vehicles. And while automotive computers monitor and control everything from airbag safety systems and anti-lock brakes to GPS systems, fuel economy and emissions controls, they also require independent repairers to invest in the tools, training and equipment necessary to properly service theses automobiles.
For many independent repairers, the current economic crisis has been a boon to their businesses. Consumers are holding on to the vehicles longer and choosing to make repairs rather than purchase new autos. Manufacturers are committed to providing independent repairers with the information they need to repair automobiles. In fact, more than 75 percent of post-warranty repairs are performed by non-dealer shops.
Right to repair is a parts bill masquerading as a repair bill. Let’s hope legislators around the country continue to see through the disguise.
Curbside Classics is all about serendipity. Good thing too, because how else would I be inspired to write 800 words about the Pontiac Trans Sport? And I don’t just mean stumbling across this bizarre Transvertible. Well, yes, that was good. But I also needed a regular Trans Sport to complement this flight of fancy. Easy, and boring enough. But take a look at the paperback tucked into the dash: John Steinbeck’s “The Wayward Bus”. Two for Two. Read More >
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