MPAVictoria writes:

Hello everyone, thank you for taking the time to read my question. I own a ’97 Ford Probe with around 160–170 thousand kilometres. I am not sure because the odometer quit working about a year and a half ago.

In the last six months I have spent about $2000 replacing the timing belt, alternator, other belts, the exhaust system and the windshield. My mechanic is now telling me that I need another $1,500 in suspension work in the very near future. Plus, my car is now holding revs until it warms up so I think I may need to get that checked out, and I also think it will soon be time to replace the crankshaft ignition sensor for the third time in 4 years, about an 8–9 hundred dollar job. All of these expenses on a 12 year old car have got me thinking about replacing it with something newer.

Read More >

I once met a girl in a complicated and unfulfilling dream. But it was so vivid, that for years afterward, I had trouble remembering whether she had been a real girlfriend or a figment of my nocturnal imagination. Stumbling across this 1967 MGB-GT brings up the same confusion: did I actually own an identical “B”, or was it too just a dream? Read More >

GM’s new CEO took to the airwaves on Sunday. If industry watchers had any doubts that Fritz Henderson is cut from the same cloth as his discredited, defenestrated predecessor, Henderson’s appearance on Meet The Press removed them. Like Rick Wagoner before him, Henderson’s facile, vague and evasive responses—re: the epic train wreck known as General Motors—revealed the full genius of the Talking Heads’ lyricists. “You’re talking a lot, but you’re not saying anything,” David Gregory forgot to interject. Alternatively, we could make this Churchillian: Never have so few said so little about so much. Even so, OMG.

There, on national TV, GM CEO Fritz Henderson showed the world (and GM customers) that he’s a craven corporate spinmeister. While trying to reassure everyone about everything, he singularly failed to reassure anyone about anything. In both tone and content, Henderson showed the wisdom of rule number one in How to Succeed in Business Without Really Trying: “get a job in a big firm.”

What GM needs is a CEO who can create root and branch reform. What they got is a man who went out of his way to tell denizens of GM’s poisonous corporate culture that not a single ass is in any danger of being kicked.

No surprise there. Red Ink Rick Wagoner’s hand-picked successor is a caretaker CEO, elevated to his promised position through primogeniture, rather than any talent for crisis management. As planned.

The Presidential Task Force on Automobiles (PTFOA) knew they were going to fire Rick Wagoner before the Treasury Department assigned them email accounts. Steve Rattner and friends had plenty of time to find a Mulally-like outsider ready, willing and able to triage GM ahead of, in the midst of, and after bankruptcy. Clearly, that’s not what the PTFOA wanted. What they wanted was what they got: a patsy.

Henderson is nothing more or less than a powerless placeholder. As the representative of “old” broken ass General Motors, the company’s new CEO is free to tell his company’s new masters how to run the terminally ill automaker. Henderson can advise the PTFOA which national and international brands should survive the forthcoming cull. He can nominate the new product mix. Anything. But the moment Henderson’s recommendations clash with the will of the people, the PTFOA can (and will) turn to him and say “What the fuck do YOU know about it?”

Which is both true and deeply worrying.

Suffice it to say, we could ask the PTFOA the same question with even LESS chance of a satisfactory answer. Although the majority of their members drive foreign cars, the task force has no more idea about successful automotive design, branding, marketing and sales than GM’s current management. If TTAC’s Best and Brightest are still arguing how to “save” GM, what chance do a bunch of politically appointed ex-journalists, lawyers and professional bureaucrats have?

Never mind. Despite their ignorance over industry matters, Barack’s automotive army is large and in charge. And they aim to keep it that way. Surrender power over GM’s fate to a new, independent, charismatic CEO? No way. Not yet, anyway. Not until the Treasury men have done whatever it is they need to do (they’ll figure that out as they go) to “protect the taxpayer.” Oh, and save the planet.

Yes, there is that. Pundits who read the PTFOA’s excoriation of GM’s vaporware Volt mistake the quango’s criticism of a tree-hugging Hail Mary as recognition that GM has to, you know, sell something that people want to buy—even if it’s not an electric car.

Wrong. President Obama’s base demands federal intervention within the evil, electric car killing industry. The feds must reduce global warming, eliminate SUVs and generally get American consumers to do the right thing, whether they want to or not. Believing that PTFOA have subsumed the president’s political agenda to the gods of ROI is, at best, naïve.

As Henderson’s appointment reveals, as the increasing chatter about a “quick” (i.e., non-judicial) bankruptcy indicates, the PTFOA are ensuring that THEY will decide which bits constitute the new, healthy “good” GM, and which bits are shunted into the old, “bad” GM. “Good” as in environmentally and union-friendly, built wherever supportive votes may live (think defense industry). “Bad” as in anything that isn’t environmentally and union-friendly, built outside fertile Democratic voting territory.

It won’t work. At this point, I can’t see GM emerging from bankruptcy as a lean, mean organization, building [at least] two brands’ worth of world class, competitive products.

Perhaps I’m wrong. Maybe the PTFOA will eventually step aside for the next presidential proxy. Maybe he’ll be the savvy kick ass CEO GM needs to survive. Until then, Henderson. As New York Times columnist Frank Rich said, change is traumatic. We ain’t seen nothing yet. Then again, maybe we have.

Matt writes:

I currently drive a 2001 BMW 525it (Touring) which has been a pleasure to drive. Unfortunately the repair costs are starting to drive me crazy and leading me to consider replacing it with something newer, warrantied, and more reliable. The budget allows for approximately $25K CDN total on either a new or gently-used car.

The requirements are that it must be a hatchback/wagon, must be a manual, and should be able to seat 6′ passengers in the back seat. I’ve racked my brain trying to think of a suitable replacement, the leading contender at the moment is a VW Rabbit, although I’m less than impressed by the 5-cylinder lump under the hood. I did have high hopes for the Mazda3 Sport but after trying it out I was less than impressed. So any suggestions, or should I just keep funding my mechanic’s kids’ university education?

Read More >

A TTAC reader writes: “Did you read the Wards AutoWorld article about how full Chrysler’s product pipeline is?  So inaccurate. I had to throw away the magazine because of it.  As a former product planner for Chrysler up until April of last year (on the Jeep WK (Grand Cherokee)), I can tell you the state of the business that I knew.

There was plenty of pinching on the interiors of the cars. We called it the “thousand dollar challenge;” which included reducing the amount of leather in the car seats (think lower back and where your butt is, but not the back of your thighs; all else vinyl). At the same time, unrealistic volumes were driving business decisions, with calculations for how JNAP [Jefferson North Assembly Plant] will be filled on three shifts for WK, endless management reviews and preparation for management reviews—leading up to a canceled product (CT, WC).

Chrysler tried to make product lines profitable by figuring out how to maximize profit by take rates and bundling. Eliminating an engine on the vehicle ultimately makes sense for reduction of complexity, but from a business case perspective, it is almost always negative (upcharge on the optional motor).

Now working in a different industry altogether, I get a sense of just how management-focused Chrysler had become. That is something the Germans can take credit for. There’s much more structure in the product development process, with the resultant inability to make a decision and endless preparation for meetings.

The “dream team” that Cerberus built was not. Specifically, the two Toyota execs were remedial. Jim Press was well liked internally, but Debra Meyer was not overly bright. She spoke and presented well, but she didn’t know cars.

I hear now that if you discuss the understaffing of ENVI relative to their proposed task you face retribution. I’ve also heard that the Jeep Patriot concept car/electric vehicle was nothing more than an interior (with cool cluster), Viper style wheels, and some other minor stuff. Nothing electric about it. Good PR tho.

They actually lost almost 35-40% of their staff in the Nov 26 buyout of white collars, not including the additional 10% they retired early (totaling then almost 50%). Of my product planning department, exactly none were left.

Brand Management and Product Planning have since been merged, an event that took until January to announce. They lost a month because they didn’t know who was going to be left, they didn’t tell people before they made a decision what was to be their future etc.

Look what happened to Mopar guys. They were mostly contract guys working for a 93 grade band supervisor. They outsourced all of the jobs to suppliers and transferred some of the contract guys over there.

XXXXXX XXXXXXX  was one of the suppliers (plastic injection stuff among others). They told their guys that they were not able to work them the full 40 hours a week due to financial limitations (payments from Chrysler?) and that they’d get one day off a week (in addition to the 10% pay cut). THEN they said you need to work five days a week and simply book those comp days for the future (where you’ll never get to use them).

They really don’t have any idea of how to approach their business. They are building a WK (2- row only), a WD (3-row Dodge), an LX that the dealers council said needs to look more different than the existing model (the one that they showed in the filing to the government to get more dollars was the revamped one, the one before was even more vanilla but not much different), and no other product that I am aware of.

I heard (was not directly involved) that the D-segment quotes from Nissan were within single digit dollars of their projected internal costs to do it inside. With only 100 people on that platform working previously, they were definitely going outside. Now virtually all of those people are gone (retired or bought out).  Normally 600–700 are required on a platform.

Internally, a platform’s profitability depends on how much overhead is assigned to it. The WK  was over-assigned overhead, to the point where it was always negative. Usually it was based on sales + an arbitrary amount decided by management. The WK was always under water with the fully accounted system we used (DCAV). But I think it was an attempt to make the platform stretch for profitability (hence the unrealistic volumes).”

I view the government’s intervention in GM’s business (or lack thereof) as automotive ebola. But we can all agree on one thing: the president’s decision to fire GM CEO Rick Wagoner was a no-brainer. Giving the Harvard MBA and GM lifer millions of dollars to guide GM to viability was like letting Al-Qaeda run a liberal arts university. Now that Wagoner’s gone, his supporters are notable by their absence. That’s because deep-sixing Red Ink Rick was the right thing to do. It was also the easy thing to do. While the MSM is lionizing Steve Rattner, the head of the presidential quango that defenestrated the GM CEO, the Obama administration’s wallow in the GM quagmire is just beginning.

There is no longer any doubt that GM is headed for bankruptcy. The GM C11 gestalt is growing by the day, of which there are only 56 left. The question is no longer “if” GM will file but “how.” Yesterday, GM’s federally elevated Chairman of the Board, Kent Kresa, signed his name to a plan unofficially called “Good GM, Bad GM.” In this scenario, the government would split GM into two companies, “old” (bad) and “new” (good). GM’s best bits would become part of the unencumbered business. The remaining dreck would be sold or liquidated.

It’s a good idea—in theory. Separating the potentially profitable wheat from the same old chaff would be a relatively rapid way to reinvent the American icon. But there’s a good reason why this practice isn’t the norm: someone’s got to decide which part of GM is Michael Knight and which part’s his evil twin Garth.

In a normal bankruptcy, management creates a recovery plan. A federal judge (or judges) rules on the plan, and then oversees its execution. The judge can demand forensic accounts, call witnesses, order asset sales, protect assets, etc. Yes, yes, Delphi; the former GM parts maker that’s been in Judge Robert Drain’s bankruptcy court since the late Pleistocene era. But that doesn’t obviate the main advantage of a judicial bankruptcy process: someone without an axe to grind has the power to make sure that creditors and other “stakeholders” aren’t screwed.

Lest we forget, GM is [still] a vast, sprawling enterprise, with thousands of dealers, suppliers, workers and former workers. Both here and abroad. All dependent on various parts of GM’s business for their survival. A triage-trained bankruptcy judge decides the least bad options for all concerned.

Now imagine the Presidential Task Force on Automobiles (PTFOA) deciding which bits of GM fall into the “good” (life) or “bad” (death) column.

First of all, the separation poses a huge philosophical conundrum. What is the new GM and why? If you subscribe to the theory that Chevrolet and Cadillac are the only GM brands worth saving, what of GMC, which accounts for a large chunk of GM’s truck biz? Kill or consolidate?

Viability means profitability, which requires both situational awareness and dedication to a specific competitive advantage (a.k.a. a unique selling point). The PTFOA’s recent report said the money-making GM of the future would build and sell reliable, practical, safe and fuel efficient vehicles. Must. Choose. One. Oh, and WTH does any of that have to do with Cadillac?

Secondly, on a more practical level, holy shit. GM has assets all over the world, with enough overlap to keep bean counters busy for decades (as it has). So which vehicles will these “good” brands sell, and where will they be made? Will the new GM only build vehicles in the U.S.? Given that some of the best/most profitable GM products are fabricated outside of the United States, an America-first approach would put the “good” GM at a huge competitive disadvantage.

Which, of course, leads us to the most important thumbs-up, thumbs-down consideration of all: politics. In a judge’s case, there is no political consideration. He or she is beholden to no single constituency. In contrast, the PTFOA. Anyone who thinks that this politically appointed body will be ready, willing and able to set aside partisan politics to look after the taxpayer’s best financial interest is woefully naive.

If nothing else, we’ve not heard the last of the United Auto Workers (UAW). So far, the union’s done all that they could do to “help” GM: nothing (i.e. no major concessions). The next step: make sure the PTFOA looks after UAW members’ interests in the pre-pack process. And while that’s happening, political markers are already being called in. How many pols with a GM factory in their jurisdiction have PTFOA boss Timothy Geithner in their sights? I’m thinking . . . all of them.

So here’s my idea: the PTFOA calls in GM’s federal loans. GM files for Chapter 11 protection. A bankruptcy judge does his or her thing. The feds (that’s you and me) provide debtor-in-possession financing (I’d prefer C7 but no one asked me). Fair enough?

Stargazer writes:

I have a slight head gasket leak in a 1993 GMC van, 350 cu. in. engine. I know that I will have to replace the gasket eventually; however, a friend suggested a head gasket sealant. This sealant drops into the radiator, and seals the leak. This friend had worked on cars professionally, so his recommendation has weight with me. Would you recommend this fix for a one hundred mile trip? I need the van to tow something.

Read More >

Most auto industry observers have lauded President Obama’s decision to defenestrate GM CEO Rick Wagoner and his Board of Bystanders. Their logic is as simple as one, two, three. One: U.S. taxpayers have “loaned” The General billions of dollars. Two: GM’s management failed to provide a viable viability plan to return the money. Three: the presidential putsch protects America’s “investment” in General Motors. Yes, well, protect THIS. When GM files for bankruptcy 59 days hence, $17.4 to $19.5 billion worth of taxpayer money will disappear down a rathole, never to return. That’s a conservative estimate of the total amount of federal “loans” and grants and God-knows-what that will be wiped out the moment the judge signs GM’s C11 papers. Oh, and after we kiss that cash goodbye, U.S. taxpayers will provide the cratered car maker with debtor-in-possession financing. In other words, more money. And who’s to say that money will ever be repaid? What’s the end game? Is there one?

President Obama justified his intervention in the American automobile industry with a vision of a revitalized General Motors. (Chrysler not so much.) With Uncle Sam’s help, GM will one day rise again. It will produce the clean-running, high mileage vehicles of the future, built right here in the U.S. by yada yada yada. Seriously? Does anyone seriously believe that a post-Chapter 11 General Motors will build and sell products that will be the envy of the world?

Post-C11, GM will trim down to two brands: Chevrolet and Cadillac. Costs will be cut to the bone. The United Auto Workers’ power will be denuded. Legacy issues? Banished. Bloated dealer network? Decimated. GM may even emerge from C11 with a Mulally-like leader and a fiercely independent and intelligent Board of Directors; ready, willing and able to reinvent GM’s poisonous corporate culture. And then . . . GM will face a leaner, hungrier, larger Honda, Nissan, Toyota, Hyundai, VW and Ford.

Good luck with that.

Once upon a time, GM could have entered bankruptcy, cleaned its own clock and survived. The talent locked-up inside the artist formerly known as the world’s largest automaker could have been refocused, redeployed and redirected. But CEO Rick Wagoner couldn’t see the diem, never mind carpe it. His delay and denial made GM’s recovery both more expensive and less likely.

Amongst other Shiva-like maneuvers, Wagoner created four sales “channels” for GM’s eight stricken car brands, trading internecine warfare for outright paralysis. As resources diminished, the key question—who makes what for whom when, where, why and at what price point—became a Gordian knot. “Why” became “why not” became “whatever.” A Cadillac sports wagon? You betcha. GM’s last next big thing, the pedestal-dwelling plug-in hybrid Chevrolet Volt, is the poster boy for the company’s headless chickenism.

And now, nothing. GM Car Czar Bob Lutz has retreated into the shadows, counting the days until he collects his bankruptcy-proof pension, watching as the company’s creative process (such as it is) slips into chaos. Meanwhile, GM’s Best and Brightest have left the building. The Presidential Task Force on Automobiles (PTFOA) rightly ripped Red Ink Rick’s ridiculous rabble a new REDACTED, but their “restructuring fact sheet” makes one wonder about their ability steer a course into the future. What’s the plan, Stan?

“The new GM will have a significant focus on developing high fuel-efficiency cars that have broad consumer appeal because they are cost-effective, have good performance and are reliable, durable and safe.” PC it may be, but that hardly sounds like an ideal recipe for world-class Cadillacs. Which leaves Chevrolet. Trying to play catch-up with battle-hardened, technologically adept, customer retaining competition.

Again, good luck with that.

Fifty-nine days from today, GM will file for C11. Chevy and Cadillac will eventually emerge from the rubble. The chosen ones will survive until they come off the federal teat. They may even survive after that. But they will be damaged brands—welfare queens tainted by their association with the federal government. Even if Chevrolet and Cadillac create world-beating products with industry-leading customer service, they will have the stench of corruption. Their logos will be a malodorous reminder that they achieved their success off the backs of the American taxpayer, rather than honest labor.

OK, maybe that’s a bit much. Americans love a comeback kid. And what late 1940s industry expert could have predicted that his fellow countrymen would elevate Japanese brands to the top of the family and luxury car sales charts? But do we really have to pay twice for GM’s resurrection?

If General Motors had filed for Chapter 11 when they coulda shoulda, no tax money would have been harmed in the making of this [entirely theoretical] renaissance. As it currently stands, there is no end point. Sure, Chrysler repaid its loans way back when and . . . oh dear. Despite all that government help they’re in a bit of mess now aren’t they? You know, in a DOA sort of way. So maybe, just maybe, government assistance is a form of assisted suicide. Perish the thought.

Take a good long look at this handsome car. This beauty was one of the best in that beautiful decade of the sixties. Are you seeing its magnetic attraction yet? Well, this rough survivor might need a little help; try squinting a bit. I sure saw it when I was seventeen; I simply couldn’t keep my eyes off a black coupe exactly like this. And as a consequence, I learned a painful and lasting lesson. OK, you’d better stop looking and keep reading. Read More >

It’s time to buy Ford stock. It’s the big winner from the Presidential Task Force on Automobiles (PTFOA) announcement today– although you wouldn’t know it listening to the MSM. That’s the way Ford wants it… below the radar, off the screen, out of the limelight. They’ve been getting a dead cat bounce already; never has silence been so golden. The dictum “never gloat in the misery of others” makes for good business sense, since one never knows when the table will turn. Anyway, here’s why Ford will ride high. 

First, Chrysler will go away thirty days from now. There is no deal with Fiat that saves Chrysler – ever. Why would Fiat take a stake in a company where the US taxpayer gets paid ahead of the Italians? Would you transfer your engines, your cars, your expertise and get zero return on your money for years? And add the fact that it will be at least two years before pasta-powered cars show up in America– with no guarantee that Americans really want very small Euro cars anyways. How does Chrysler survive in the interim? Will six billion dollars in assistance carry Chrysler for that period? I think not.

Then let’s examine the fact that Chrysler, unlike GM, has mostly secured debt lenders which are owed only $7 billion. Are they going to surrender their debt for an equity stake in a company that likely has no future even when run by the Italians? Heck, they’re better off with the liquidation proceeds. And that’s what they’ll do: give the Presidential Task Force on Automobiles the middle finger and hold firm on getting repaid. Hello Chapter 7 for Chrysler. 

And GM? Do you really think that there’s any plausible way for GM to restructure its entire business in the next sixty days? Nope, and the PTFOA and GM know it. Today’s “conditional bailout” is really just a prelude to pre-packaged bankruptcy. It’s a breather that gives the company the time to get its ducks in a row before the filing. As the Viability Report acknowledges, General Motors has to sacrifice brands and dealers. Only a bankruptcy allows those changes without facing massive liabilities. Count on a GM bankruptcy as a fact, not speculation.

So with Chrysler gone to nothing but an asset sale, and GM rapidly downsizing to a much smaller company worldwide (likely consisting of only two brands in North America), the playing field for Ford just opened up. No more rabid discounting wars led by Chrysler. GM will be spending time to figure out a proper restructuring with management tied up in a court reorganization.  Wow, in the midst of an auto meltdown, Ford sneaks through by staying the course on a plan designed two years ago.

it’s a new day dawning for Ford. The Blue Oval Boys will pick up a significant share of the commercial fleet business. That’s the big companies and government agencies that buy vehicles and mostly only from domestics. The three domestics currently split roughly 600k vehicles a year. The number is set to increase with the “stimulus package. With Chrysler gone and GM downsizing all of its excess capacity, Ford will see orders roll in. And with less competition, prices go up. Smell those profits.

On the consumer side, Ford will have a new Taurus this spring. The 2010 Fusion is rolling into showrooms now. Next year, a Euro Focus hits our shores (although built in North America). New turbocharged engines are on their way. And of course, Ford’s stalwart truck business continues.  More units sold with better pricing can only produce more cash flow and profits for Ford.

Ford Europe benefits from GM’s struggles here. GM’s Opel can’t survive on its own. Without German government assistance, it’s more likely than not that Opel joins the dustbin of failed automakers. But even if the German government steps up, Opel still suffers from an “also ran” image in Europe. As a ward of the German government, Opel will make all the wrong decisions.  Don’t forget, German really has its own “Green Party” as a voice in the legislature.  

Sure, Ford’s balance sheet isn’t pretty with the company leveraged to the hilt. But it will accomplish a debt exchange since the carnage of a bankruptcy (thank you Chrysler and GM) leaves the creditors with… not much. Better to take the equity today and some cash for a stake in the future with Ford. While it will dilute existing shareholders, positive earnings of any kind will put a fire under Ford’s stock.  And that’s going to happen sooner than later. The US car market is way below trend at a nine million units SAAR – and can only rebound above trend when buyers return. Ford will be there to benefit. Count on it.

The U.S. government (ostensibly representing “the taxpayers”) is right to insist on conditions to the second round of federal loans to Chrysler and GM. As always, the devil is in the details. As always, the government has put politically motivated strings onto every moving appendage in this latest example of federal largess. The fundamental question here is not whether or not these strings– from a shotgun marriage between Chrysler and Fiat to a GM bondholder haircut– will rescue either company from liquidation. It’s whether or not the federal government should be involved in bailing out any company in any industry. Period. Though others may disagree, I believe that only companies absolutely essential for national defense/security might qualify for direct taxpayer support. Might. Otherwise, NFW.

This is not a left/right debate. When President Bush approved $17.4b worth of bailout bucks for GM and Chrysler– against the wishes of Congress– the Republican administration lost any credible claim that they were friends of the free market. This brazen betrayal of stated principles paved the way for the Obama administration to go whole-hog into national industrial policy. Although the sitting president is selling his latest plans for Chrysler and GM on a rational economic bases, his intercession is, in fact, a purely political maneuver. Bailout II is not designed to “save” the American auto industry. It’s tailored to favor, through political policy, certain groups at the expense of others.

In this case, the second round of bailouts is meant to ensure that the United Auto Workers (UAW) survives intact and unscathed from a debacle that is, in part, a product of their own intransigence and short-sighted greed. (Although the union’s democratic support is a given, Obama didn’t ascend to the highest office in the land without remembering to secure and nurture his base.) As a secondary goal, the still undisclosed amount of federal money headed towards Chrysler and GM is aimed at “encouraging” Detroit to produce “green” cars. High mileage machines that conform to president Obama’s and the Democrat’s political priorities– the free market be damned.

Economics (the free market variety, anyway) is all about creating wealth and expanding “the pie.” Politics is about dividing wealth up in a zero sum game: someone wins, someone loses. This is why socialism ultimately fails every time it’s tried: it subordinates economics to politics; wealth making to wealth sharing. Profit incentives to create and expand are sacrificed to punitive political incentives to conform and obey. Ultimately, there is little wealth left to share. The same endgame applies whether you’re talking about an entire economy, or a single industry.

On Sunday, U.S. Treasury Secretary Geithner refused to be drawn out on a simple question: is GM too big too fail? Geithner claimed he didn’t want to preempt the president’s announcement. In truth, he didn’t want to even admit the possibility that doing nothing, simply letting GM and Chrysler fail, was a viable alternative. But if GM and Chrysler had been refused new funding, what would happen in the long run– aside from the inevitable short-term pain the companies, their employees and shareholders (and bondholders) would have to suffer? The same thing that happens when any business or industry goes bust. New opportunities arise.

Opportunity eventually finds its way to create new businesses and industries out of failed ones. Over time, sales lost by either company would have been absorbed by other automakers, helping to maintain their “viability.” To a certain extent, other auto companies would have picked-up the jobs lost by either Chrysler or GM. Other industries would eventually absorb “excess” jobs. Over time, Ford, Honda, Nissan, Hyundai, Toyota and others would assume GM’s and Chrysler’s “lost” production, at least to the extent the market demanded it. The concomitant industry supply chain would cater to the new source–and level– of demand.

In other words, if market forces for punishing failure were allowed to actually work in this case, far from being the end of the world, the auto industry would eventually emerge HEALTHIER, with far less excess capacity and more productivity. The result would be a much better, more profitable business overall. This would in turn actually ATTRACT capital into the auto industry, and set the stage for long-term growth.

But no, we can’t stomach losing jobs in the short run– especially union jobs. So instead of letting nature take its course, the federal government spare us the pain that comes from producing goods or services that the market doesn’t want. And in doing so, president Obama and bailout suporters guarantee the laws of unintended consequences will have their day. The Brits learned this lesson the hard way back in the ’70s. So why are we bent on repeating the British Leyland epic failure here? Are we really that weak, cowardly and naive?

General Motors CEO Rick Wagoner is set to resign his position tomorrow. The timing of Wagoner’s departure is clearly symbolic. It’s meant to signal the nation that it’s OK throw bailout billions GM’s way because it’s a new day. Well, there’s a new guy at the top, anyway. Which may or may not be true, depending on whether or not Wagoner’s hand-picked successor and virtual clone Fritz Henderson inherits the job. If Henderson gets the nod, the symbolism of Wagoner’s defenestration will be far richer than its architects intended. For it will confirm the growing suspicion that the president’s mantra of hope and change is heavy on the hope and light on the change. And while that plays out, Wagoner’s resignation will eventually be seen as a way point on a journey of self-destruction, rather than a turning point on a bridge to . . . nowhere.

This is not the place for a post mortem examination of Rick Wagoner’s career as a GM lifer. There is no need nor room for debate about Wagoner’s negative impact on the artist formerly known as the world’s largest automaker. By any objective metric—market share, profitability, share price, capitalization, anything—Wagoner’s tenure at the top was an abject, epic failure. In fact, I pronounced Wagoner R.I.P. three years ago, in March 2006. I said it then, I’ll say it now: it’s too late to save General Motors. General George S. Patton himself could rise up from the dead, slap a few of Wagoner’s soldiers, assume command and fail. All Wagoner’s replacement can do, indeed should do, is prepare the automaker for bankruptcy.

Wagoner leaves GM buried [barely] alive under a Himalayan mountain of debt, much of it his creation (under the guise of lowering operating costs). The company which once held the title as the world’s most profitable corporation now carries some $46.5B worth of debt. President Obama could add 20 or 30 or even 50 billion dollars in “loans” for GM tomorrow. He could force a 100 percent debt-for-equity swap for ten cents on the dollar amongst GM’s bondholders. He could dictate that the United Auto Workers accept stock in lieu of ANY contribution to its Mother of All Health Care Funds. And it still wouldn’t be enough to extricate General Motors from its current predicament.

GM has been and will continue to be an over-dealered, under-funded mess. Its brands are a complete disaster. Even the brands with some remaining psychological equity—Chevrolet and Cadillac chief amongst them—are suffering from bailout backlash as Americans grow angry at the increasingly obvious black hole that is Bailout Nation. With a handful of notable exceptions (mainly because they ARE exceptions), GM’s products are not competitive. And, lest we forget, the U.S. new car market is still contracting violently, with millions of unsold units just waiting for their makers to give up, sell them at any price and further depress sales and profits. In short, GM currently has zero opportunity for relative or absolute growth.

Given this hopeless morass, Wagoner’s resignation comes at the worst possible moment. It will fuel the boundless, baseless optimism which led to the first $17.4B GM bailout (not including a share of the Department of Energy’s $25B retooling loans or the $1B GMAC-related loan). Of course, that’s the entire point: Wagoner’s sword-falling routine gives the Obama administration and his Presidential Task Force on Automobiles something “concrete” upon which to pin their empty message of future auto industry transformation. What’s more, with Wagoner out of the way, the president can amp-up his electric car and high mileage dreams. See? We’re not subsidizing the same old SUV-building bastards. We’re reinventing the car industry!

What’s the bet Wagoner will announce his resignation without a single mea culpa? His statement will be as short as it will be meaningless. Seed-sowing, torch passing, foundation building—no matter what the metaphor, the underlying message will be “I prepared GM for the success to follow.” The fact that there will be no success to follow is neither here nor there. The feds’ willingness to keep GM on taxpayer funded life support means that Wagoner will be enjoying the fruits of his labors—including his bankruptcy-proof pension—even as those who inherit his legacy of his incompetence struggle to extricate anything of value from the inevitable corporate carnage.

I can’t decide whether Wagoner’s career at GM is Wagnerian, Chekovian (Cherry Orchard), Millerian (Death of a Salesman) or Shakespearean (King Lear). In the final analysis, it’s all of the above. And as long as we’re going down the literary path, Wagoner is the ultimate Hollow Man. Although news of his resignation arrives with something of a bang, the company Wagoner guided will not end with equal force. Thanks to the men at the top of the GM pyramid it will end with a whimper.

Do you ever feel trapped in Monty Python movie?  The B&B discussion following Edward Niedermeyer’s post, CARB So Crazy: California To Ban Black Cars, made me think so. First soldier: What? A swallow carrying a coconut? King Arthur: I could grip it by the husk! First soldier: It’s not a question of where he grips it! It’s a simple question of weight ratios! A five ounce bird could not carry a one pound coconut. King Arthur: Well, it doesn’t matter. First soldier: Listen. In order to maintain air-speed velocity, a swallow needs to beat its wings forty-three times every second, right? King Arthur: Please! First soldier: Am I right? I’m no Michael Palin or Graham Chapman, but I’ve got an idea or two about white and black colored cars.

I track mpg with the fortitude of a deranged obsessive-compulsive disordered person checking to make sure the front door of his house is locked. Each time I top off my tank, I record how many miles I’ve driven since my last fill-up. I note whether that tank of gas was expended running about town or on the highway, whether I predominantly used the A/C, and I calculate the fuel efficiency. My ’05 V6 Jeep Liberty has about 58K miles on the odo and I have mileage readings for 54,478 of ’em. I’ve also tracked the mileage of my ’01 4-cylinder Honda Accord over the last 35K miles. Both of my vehicles are metallic black.

The California Air Resources Board proposes to regulate the reflectivity of car paint and windows to increase fuel efficiency. They theorize that lighter colored cars get better gas mileage because the roof reflects more sunlight, so the air conditioner doesn’t have to run as often due to lower interior temperatures. This is great news. Overall, my Jeep gets 16.35 miles per gallon.  All I have to do is paint her white and my fuel efficiency will jump . . . how much?

Don’t know. Although CARB’s public presentation contains all sorts of numbers, charts and graphs, they neglect to reference a single study that validates their claim. Come on! All they have to do is get mechanically similar cars painted white or black and compare fuel consumption. Why the rush to take away a woman’s right to choose [the color of her car] (in my family, I chose the hardware and my wife picks the color) when we don’t know whether or not there will be a meaningful savings in CO₂ emissions?  After all, I thought most Californians were Pro Choice!

Living in north Texas, I am all too familiar with climbing into mobile solar ovens after a long day at work. When it’s really hot outside, everyone has their A/C on.  So CARB’s savings claims are based on the fact that four months of each year evening commute temperatures range between 62° F and 77° F—mid-range temperatures where non-reflective cars would need the A/C on after a long soak in the sun but “cool cars” would not.

However, the very Lawrence Berkley National Laboratory (LBNL) study that CARB uses to support their proposal debunks this assumption. The Cooling Load Reduction chart (page 14, “Cool Coatings for Cool Cars: A measure to cool the globe”) shows that by 5 p.m. there is NO difference in air temperature measured at the anterior-heading compartment (i.e., where the driver’s head would be). The “cool car” soaking in the sun heats up slower, but by about 2 p.m., the gap has closed and the interior temperatures remain virtually identical the remainder of the day. Therefore, the only sun soaked vehicles that would see a decrease in A/C usage would be those that leave work at lunchtime, not the masses in evening commute.

When I drive with the A/C on, I get 1.13 (Jeep) and 1.16 (Accord) fewer miles per gallon. There would be no change in A/C usage during the morning since solar soak would not yet be a factor.  Additionally, as the LBNL study shows, the proposed “cool car” protections would be of no help during my evening commute. However, over the protestations of my cholesterol clogged arteries, I make a run for fast food about four days a week at lunchtime. Using CARB’s dubious assumption of four months’ savings per year, I could satisfy sixty-nine more Big Mac attacks without switching on my A/C each year.  But I don’t travel far—about (generously) six miles round trip.

So what would my annual savings be? 0.68 (Accord) to 1.96 gallons (Jeep).

Ladies and Gentlemen, let the debate carry on.

First soldier: Am I right?

King Arthur: I’m not interested!

Second soldier: It could be carried by an African swallow.

First soldier: Oh yeah, an African swallow, maybe, but not a European swallow. That’s my point.

Second soldier: But then the African swallow’s not migratory . . .

Eric writes: 

I have a FWD car.  One tire has a nail in it and probably can’t be repaired.
1a)  If the replacement is the same model/size/brand tire, should I replace one tire or buy two? 
1b)  If one tire, should it go in the front right (to wear out the new tire faster, catch it up to the other 3) or rear (newer tires on back avoid oversteer)?

Same question as 1a and 1 b except:

2)  if they don’t have the same model tire, and I am offered a different tread but same size/manufacturer/all season…

Lots of people get nails in one tire only, so hopefully your answer will get lots of Google hits! Thanks!

Read More >

Our president recently hit the late-night talk show scene, giving all a taste of the “Washington Bubble.” He’s not alone: Judging by the comments around the Interweb, every red-blooded American automotive journalist totally hearts the 2010 Taurus SHO. But does the journos’ wish for a reincarnated SHO jibe with the harsh reality of Ford’s market demographics? Or to paraphrase Norm MacDonald, “while the SHO may not prove anything, it certainly does nothing to disprove the theory that Volvo-based Fords are a waste of money.” Yeah, it takes brass balls to knock a car you’ve touched, but haven’t driven. But the circumstances around the all-new Taurus give me pause . . .

First off, how often to you hear about the regular Taurus? One key to the SHO model’s original success: The bread-and-butter version stood on its own for three years before the SHO’s arrival. But the average 2010 Taurus is almost old hat: We’ve seen this story unfold the past five years and nobody (with an open checkbook) cares one way or the other. Just like its 2005 counterpart, the latest version of the Taurus will be a respectable car. But this does nothing to disprove my theory that Volvo-based Fords are a waste of money.

Second, what makes lightning strike twice? Styling. Much of the first model’s interpretation of the Euro-Sierra worked. The 2010’s “kinetic” energy comes from the Mondeo. Only not so much. In pictures and in person, the Taurus fails to inspire. It’s no flying jellybean: There’s a Subaru-ish nose and a host of sheetmetal adaptations of the badass Ford Interceptor concept on the dorky hard points of the D3 chassis. Yet Peter Horbury, Ford’s North American design director, proclaims, “like the 1986 original, the new 2010 Taurus differentiates by combining style with substance.”

Too bad about that. There’s an obvious difference between a clean-sheet creation and a quickie conversion of a (failed) platform. Even worse, the 2010 Taurus redesign loses the previous model’s quarter window for black C-pillar trim, giving the illusion of a sleeker profile from a longer DLO (daylight opening). Which almost works—if you ignore the fat-assed beltline and tacky faux ventiports. No surprise, cash is tight and the basic badness of the D3 must remain intact.

The first two generations weighed around 3,300 lbs.; the engine put out torque-steer-free 220 hp; and there was a readily available manual transmission. The Taurus SHO was stupid fun in any dynamic event. Plus, the previous 100 percent American chassis scored safety ratings on par with Volvo sedans of the time.

The latest SHO is the Fat Elvis of sport sedans. The engine stumps up 365 hp, there’s mandatory all-wheel drive and automatic transmission, and a curb weight around 4,300 lbs. (300 lbs. over the Pontiac G8). The safety is stellar (because it is a Volvo). Given the feature creep of the Ford Flex, the SHO could sticker north of $35 large. With options, maybe over $40 grand. How great is that? I’ve voiced these concerns to pistonheads around the web and one answer comes back: Nobody pays sticker for a Ford, just wait for the discounts. So maybe this is a Taurus after all.

And if taking the Ford Taurus up to a dee-luxe apartment in the sky was bad enough, Ford didn’t learn from others’ mistakes. The Toyota Cressida/Avalon and Nissan Maxima prove that unique platforms for poser luxury sedans are out of the question. Mulally loves the Taurus, but he forgot its intrinsic appeal. The four-door was the go-getter working late nights in a cubicle, not an endowed trust-fund baby overdressed in a tuxedo at a garden party.

Not to mention the critics were proved right when calling out Ford’s decision to split the original Taurus’s market with two nameplates on two foreign chassis. It was a colossal falure in 2005. And 2008.

Come 2010, it will be three strikes against Ford’s great experiment. And even with the SHO’s halo, the market for Volvo-Fords over $30K is not promising. Which spells doom for the company spending millions (billions?) supporting a unique platform that’s yet to justify its existence to a fully leveraged Blue Oval. And with Volvo on the chopping block, what exactly does Ford expect to gain from billions of dollars in sunk cost?

If this “cut and run” attitude sounds unpatriotic, consider what Dearborn’s finest could’ve done with the money spent on the Taurus’s three generations of continuous improvements. With Mulally’s blessings, the Blue Oval Boyz could have used the money to make a Camry-killing sedan by now. But the saving grace now belongs to the Ford Fusion and its Hybrid halo. The writing is on the wall: Nobody gets a free ride. If the 2010 Taurus fails to SHO up with some cheddar, this dead weight has gotta go.