I once attended a seminar on alien abduction hypnotherapy. When we got to the Q&A bit, I was flabbergasted by the audience’s enquiries. “What do you do if the alien has been in contact with a departed spirit who knew the victim, and used their influence to prevent hypnosis?” “I’d hypnotize the spirit first,” the therapist responded, without batting an eye. Suddenly, I felt very, very alone. Surely, I wasn’t the only person amongst hundreds who thought the whole thing was a patently ridiculous scam. I got that same queasy feeling today, watching my so-called colleagues questioning GM CEO Rick Wagoner about the company’s viability plan. Surely someone would point out that the whole thing is nothing but a patently ridiculous scam. Sigh. Right, let’s get to it then . . .

The 2009-2014 Restructuring Plan—as GM would prefer it called—is 117 pages long. With the help of TTAC’s crack spreadsheet busters, I could engage in a critical analysis of the automaker’s sales projections, cash flow estimates, cost savings, capital spending allocations, debt reduction plans, etc. But that would be like discussing alien breeding habits, and the meaning and use of anal probes. Yes, they did go there. But let’s not.

We’re all rational human beings. We know what GM has to do to stay in business or, let’s go wild, make enough money to pay back the $34b “investment” dragooned from taxpayers by D.C. debt addicts. GM has to take in more money than they spend.

In other words (if other words be necessary), GM has to build something profitable and then sell a shitload of it/them. Those of us with even a passing knowledge of the industry’s recent history and GM’s place within it know that’s just not going to happen. The company’s been outmaneuvered on every front: model, brand, company. Sales, brand share, overall market share. Game, set, match.

Suffice it to say, if the artist once known as the world’s largest automaker knew how to build profitable products, it wouldn’t be begging for one more hit on the federal crack pipe. Ipso facto.

So what makes GM think that this time, it’ll be different?

“Take a look at the products we can do,” Wagoner asserted at the end of the post-$34b PR bomb drop press conference. We haven’t done it a lot, but we can do it, because we kinda did it, a bit, here and there.

For some reason, Wagoner didn’t mention any specific products. Not the Chevrolet Malibu. Cadillac CTS. Pontiac . . . uh . . . . Saying that, I think he mentioned the electric/gas plug-in hybrid Chevrolet Volt at some point, but no one’s buying that. Literally.

OK. Turn to page 63, Appendix D: “Future Product Launches.” Holy shit! “This page has been left intentionally blank.” Surely, they’re not—I mean, they wouldn’t—dedicate themselves to improving what they have instead of chasing The Next Big Thing? After all, on page 16, GM promises to reduce the total number of brands from nine to five, and cut nameplates from 51 to 36.

You weren’t fooled for a second, were you?

Starting on page 64, we get one picture per page of GM’s latest crop of turnaround machines: the aforementioned Chevy Volt, Cadillac CTS Coupe (didn’t they cancel that?), Cadillac CTS Sportwagen (har har), Chevrolet Cruze (didn’t they . . . oh, right, import), Chevrolet Camaro (’nuff said, already), Chevrolet Equinox, new Buick LaCrosse (yes they already make one) and new Cadillac SRX.

Estimated production? Break even point? Profit per vehicle? Nope. But the document lists the most fuel efficient powertrain that will be available—if not the highway miles it will deliver.

Now, page 72. Appendix E gives us bullet points re: GM’s all-important rejigged brand strategy. HUMMER, Saturn and Saab are obvious by their absence. Once that pesky troika of red ink spewers is strategic reviewed out of existence, GM will have four core brands in three sales channels.

You lost me. Let’s try that again. Chevrolet, Buick, GMC and Cadillac will be sold at Chevrolet, Buick-Pontiac-GMC, and Cadillac dealers.

You noticed that did you? Pontiac is now a “niche” brand; it’s only kinda core. More importantly, GM is finally identifying each brand’s market position. Chevrolet = Expressive value. Buick = Sophisticated Quality, Luxury and Craftsmanship. Pontiac = Youthful and Sporty. GMC = Engineering Excellence with Capability and Functionality. Cadillac = Performance Luxury with Aspirational Appeal.

So, how’s that going? I only ask because it’s not. The chances of it suddenly working out for the cash-strapped automaker are about as high as they were before RIck Wagoner guided GM from a death spiral into a nose first landing. Which reminds me . . .

I collared the alien abduction specialist after the seminar. An artist’s impression of a crashed extra-terrestrial spacecraft filled the screen behind him. “What if there aren’t aliens?” I asked the hypnotist, hypothetically. “What if you aren’t really standing there?” he replied. Within seconds, I wasn’t. Unfortunately, when it comes to GM, US taxpayers don’t have that option.

Ever heard a movie hero say, “It sounds simple, but it just might work!”? Humans have a natural tendency to over-complicate problems and, thus, devise inherently delicate solutions. Have a look at Operation Eagle Claw, the 1980 Iranian hostage rescue attempt. Or, consider the upcoming Presidential Task Force on Autos. The PTFA will waste countless hours with Chrysler and GM auto execs, union reps, dealer council chiefs, supplier supremos, investment bankers, outside analysts and not a single average car buyer. They will devise a clever plan that will please no one and fix nothing. What a waste. In this case, all the Obama administration need do is nothing whatsoever.

Chrysler and GM are trussed-up with ropes made of Gordian knots. Their brands are a disaster, but they can’t kill brands without violating 50 states worth of franchise laws. Their debt is mountainous, but they can’t get the paper holders to swap obligations for equity. They can’t shut excess to capacity factories, but they can’t afford not to shut factories. They can’t work with United Auto Workers (UAW) work rules, but they can’t get rid of them. The need to improve their products STAT, but they can’t afford to and, even if they could, the market sucks.

The best way to sort this out: bankruptcy. But since we’re paying people to over-analyze the situation, let’s drill down.

Debt

Assuming GM can eliminate $18B of unsecured bond debt, they’ll still need at least $18B of new debt ($9.4B already advanced so far by Uncle Sam and the need for an equal amount more a certainty than not) thus netting a debt reduction of zero. Nothing to see here folks, move on.

And Chrysler? There’s zero chance of its bank lenders ($7B owed) of swapping anything. The parts are worth more than the whole and they’ll get (most of) their money back after selling off the minivan plant, Jeep, and anything else which they’ve got covered by security agreements. But Chrysler took on $4B from the government and is looking for $3B more. That’s a total of $7B—exactly the same amount as the existing bank debt. So eliminating existing bank debt and taking on IOUs to Uncle Sam places the company back where it started.

Union obligations

Bringing union wages and work rules into parity with transplants’ might be helpful in the long run, but labor costs represent under 10 percent percent of Chrysler and GM’s total running expenses. And we’re only talking about US labor—not for the rest of GM’s (crumbling) global empire. At best, a new deal with the UAW might save GM North America a billion dollars. Not enough to right a ship that’s losing $2B+ a month in cash flow. Chrysler’s rapidly shrinking workforce and increasingly undesirably product portfolio render any union cost discussion irrelevant. Period.

In terms of the automakers’ obligations to stuff their union’s health care superfund with cash, the UAW won’t go there. Unless they can get the US government (that’s you and me) to guarantee the proposed paper. If that happens, his retiree flock will realize Barack Obama’s dreams: guaranteed health care above and beyond existing Medicare/Medicaid coverage. Obama can’t be that stupid, right?

But even if he gets this guarantee, GM and Chrysler both have to still come up with billions of dollars before January 1, 2010, to fund the new VEBA anyways. And where is that money supposed to come from? Profits and positive cash flow in 2009? Not a chance.

So the take so far—assuming even these companies can hit the targets outlined by the government for the loans—is that it’s still not enough to keep these companies afloat. Existing debt swapped for new paper plus new government debt nets nothing. No savings. A zero change in the debt balances. The new VEBA still will require a cash down payment—a non-trivial amount too. And labor savings that might provide value later but are relatively meaningless in the depressed car market of 2009.

Brand, model and dealer reductions

How much will this cost without a bankruptcy? Dealers won’t go away quietly in the night. They’ve got an army of state attorney generals to protect them. And while Saturn might be a “new kind of car company” with operating agreements, not franchises, among its dealers, it won’t prevent lawsuits. GM can’t give away Saab or Hummer at any price so no easy out there. And it’s not clear that Chrysler could even kill one brand amongst its troika without inflicting a mortal wound. (Assuming it’s worth saving Chrysler.)

Conclusion

All that’s filler, of course. The only thing that needs saying, or doing: let both companies go into bankruptcy now, without crafting any governmental solution whatsoever to prevent it. Then we can see what’s worth saving and how much it will cost. Simple, eh?

A mainstream carmaker has no business building niche products. Literally. For one thing, they’re hardly ever profitable. For another, even when they are, their profits are relatively insignificant. And most importantly, “halo cars” are four-wheeled glass and steel versions of Dumbo’s magic feather. They lead manufacturers to mistake cause with effect: if we build this, we must be good. In fact, any automaker that focuses its creative, financial and corporate resources on a halo car risks forgetting how to do what it did to get those resources in the first place—and an eventual plummet towards the circus floor. The Chevrolet Corvette may be only one of GM’s magic feathers, but it’s the most famous and, therefore, visible. GM should kill it, STAT.

Next week, GM’s heads head back to the bailout buffet. They’ll try to convince your elected representatives to provide another heaping helping of taxpayer bucks (a.k.a. federal loans). Both the company and its camp followers [sic] will, once again, concentrate on the numbers: union wages and benefits, bondholder debt-for-equity swaps, VEBA payments, the old SAAR, the projected SAAR, the car SAAR, who’s SAARy now, etc. And why not? As a Harvard MBA, General Motors lifer and former CFO, GM CEO Rick Wagoner never met a balance sheet he couldn’t dress-up for a party—even if it’s a freaker’s ball.

Which brings us back to the ‘Vette: the freaker’s ball pace car. The Chevrolet Corvette is a singular machine, a modern throwback that offers more bang for the buck than Marietta’s Bullet Stop. An enthusiast who buys one is beyond reproach, in the same sense that a homeowner who restores a Victorian pile deserves nothing by kudos. And? The Corvette is a brand anomaly; it’s as much a Chevy as a Cayenne is a Porsche, only less so. Again, the Corvette is awesome machine in and of itself. But out and outside of itself, it makes no sense.

Do Chevrolet products need a personality? Of course not. The Malibu is the proper template. It’s a car. Good mileage, reasonable price, adequate comfort, reliable (fingers crossed), not ugly. Value. While pistonheads worship at the temple of Bowling Green, Chevy buyers are busy bowling. They’re working class people who can’t afford a sports car, never mind one that costs $50K+. The new ‘Bu and old Impala are their best case scenario.

The only possible defense for this great landing at the wrong airport: symbolic value. “America’s sports car” and all that. Which is why Wagoner should announce its termination.

“Ladies and gentlemen, as you know, General Motor’s future hangs by a thread. The decisions we make today mean life or death for this great American enterprise. We take our responsibility seriously. GM can not—will not—shy away from the unpleasant parts of this monumental task.

“We have therefore decided to re-examine our entire brand and product portfolio, to decide which brands and vehicles can help us survive, and which vehicles and brands we must abandon to ensure our survival.

“It is with great regret that I must announce that General Motors will no longer build the Chevrolet Corvette.

“We here at General Motors are proud of the fine men and women who have designed and built this vehicle for generations of appreciative enthusiasts. But General Motors must leave no stone unturned in our pursuit of profitability. We must address our problems and shortcomings with unflinching honesty, and do whatever it takes to correct them.

“As part of this process, we are refocusing the Chevrolet brand. Chevy will now offer a limited range of entry-level automobiles. Each one of the brand’s three models will provide class-leading quality, comfort, fuel economy and value.

“The Corvette is a world class sports car. But it does not fit our mission-critical effort to restore Chevrolet, and thus GM, to profitability. We take our obligation to repay the generosity of the American taxpayer seriously. If we must sacrifice the Chevrolet Corvette to satisfy our obligations, we will do it.

“At some point in the near future, as soon as we can, the Corvette will rejoin GM’s fleet as a Cadillac. It will be a different car, with the same goal: to give enthusiasts the world’s best and most thrilling sports car, bar none. An all-American product.

“For those of you disappointed by this news, I’d like to point out that we are redoubling our efforts to deliver the plug-in Chevrolet Volt, a hybrid vehicle that will reinvent the way Americans drive. It’s a new kind of product that will help us refocus Chevy on what made the brand America’s most popular car brand.

“I thank you for your time and understanding. Rest assured that as painful as this is, the Corvette’s sacrifice will be GM’s gain.”

Lithium-ion batteries are not yet a major source of automotive propulsion. Excluding the li-ion cells lingering within the $100k+ Tesla Roadster, not a single volume vehicle depends on the technology. Toyota has adopted a “go slow” policy on li-on cells re: their gas – electric Synergy Drive (most famously found inside the Prius). Sure, li-ion batteries will power Chevrolet’s electric – gas hybrid Volt. Eventually. And that’s no small point. At the moment, with gas prices at historic low levels, hybrids simply aren’t selling. Of course, nothing’s really selling. Except the idea that we need lots and lots of hybrids and that those hybrids will need lithium ion batteries and we better make sure we have enough lithium otherwise the vision of clean, gas-free personal transportation will disappear. And the New York Times can’t have that, now can it?

Earlier this week, The Times set the autoblogosphere abuzz with a look at Bolivia’s bounteous lithium supply. According to the Times, the United States Geological Survey estimates Bolivia is home to some 5.4m tons of lithium. The U.S. soil supposedly contains “just” 410lk tons of lithium. Ladies and gentlemen of the politically aware persuasion, forget ye olde missile gap. Welcome to the “lithium gap.”

Francisco Quisbert is the leader of a group of salt gatherers and quinoa farmers who live near a giant salt flat. Quisbert’s fifteen minutes of fame arrived when a NYT reporter recorded him pronouncing “we know that Bolivia can become the Saudi Arabia of lithium.” If that wasn’t enough to raise the hackles of the friends of hybrids, Quisbert also played the class card. “We are poor. But we are not stupid peasants. The lithium may be Bolivia’s, but it is also our property.”

Yeah right. Meanwhile, back to the template Times’ readers know and love to hate: western exploitation. The head of Bolivia’s national– yes national– lithium mining company provided the necessary rhetoric. “The previous imperialist model of exploitation of our natural resources will never be repeated in Bolivia. Maybe there could be the possibility of foreigners accepted as minority partners, or better yet, as our clients.”

Bolivia’s President (and former Coca grower) Evo Morales is no stranger to the government-sanctioned expropriation technique commonly known as “nationalization.” Whether sending soldiers into BP’s local headquarters or nationalizing Brazil’s natural gas operations and then charging higher prices, Morales has made it clear that he believes natural resources belong to local indigenous peoples (even if they’re not as well compensated as, say, the Bolivian government and Morales-appointed representatives).  

Obviously, lithium commerce predates hybrid hopes. The battery industry has been buying lithium for well over a decade. And Bolivia’s reluctance to grant that industry grant unfettered access to its lithium predates its current leftist president. When right wing nationalists controlled the Bolivian government in the early 90s, advances by the American firm LithCo to secure supplies were thwarted. Unlike the early days of Saudi oil exploration, American firms are on the outside looking in.

The Times reports that Sumitomo, Mitsubishi and a French conglomerate headed by Vincent Bolloré have been trying to wrangle a lithium extraction deal with the Morales government. More recently, Reuters has reported that the Korean firm LG is trying to jump onto the Bolivian lithium bandwagon.

Morales is having none of it. Well, some. The companies’ opportunities are limited to investment in the government operation, which consists of a $6m pilot plant. Construction of a $250m lithium extraction plant is proceding at what The Guardian calls a “snails pace.”

According to Bolivia’s state mining director Freddy Beltran, “there haven’t been any developments (in the negotiations with Mitsubishi, Sumitomo or Bolloré). None of them has made a proposal including (the creation of a lithium) industry.”

Beltran’s kvetch: the three firms all want to export raw lithium. (Why does this sound familiar?) The Bolivian government wants them to develop a processing industry in-country.

Yes, well, the Bolivian government is likely to come to some kind of “arrangement” fairly soon. As one Bolivian economist puts it, “we have the most magnificent lithium reserves on the planet, but if we don’t step into the race now, we will lose this chance. The market will find other solutions for the world’s battery needs.”

Or other lithium supplies. The WSJ’s Environmental Capital blog (and Lithium Abundance blog) points out that increasing demand for lithium would increase exploration, which could turn up new reserves.  

What’s more, battery technology is hot (so to speak). With federal funding providing the match. Scientists are hot on the trail of alternative battery materials– from zinc-air to improved nickle-metal-hydrate. Meanwhile, China is pumping out lithium for its own booming battery sector.  

In short, despite the NYT geo-political paranoia, anyone worrying about the possibility of a Bolivian lithium embargo is wasting their energy.

Yesterday, we relayed a Reuters report that SAIC might buy out the Chinese part of GM, that GM might take the money and bail. Today, true to form, the denials arrived. Again according to Reuters, GM says they have no plan to sell shares in its joint venture SAIC. This according to Henry Wong, a spokesman for General Motors China. Reuters is positive that GM held talks with SAIC Motor about selling part of its 50 percent stake in the joint venture, or other assets.  As if on cue, GM’s plan to enter a joint venture with SAIC’s competitor FAW received new traction today. The plan had been on hold for a while.

In the meantime, the speed dating game between Chinese companies and desperate Detroit companies who want to swap their corporate children for cash continues. Today on the radar screen, again: Volvo.  Reuters has picked up indications that Chinese car maker Chery Automobile has held talks with several European auto brands, including Ford’s Volvo, and is interested in an acquisition. What is interesting is that Gasgoo didn’t simply reprint the Reuters report.

They added their own story, in which they quoted the man himself, Yin Tongyao, CEO of Chery as saying Chery would not rule out the possibility of buying a troubled European auto brand, and that “Volvo is believed to be one of the choices.” Now that’s something else.

Gasgoo added that Chery received a 10 billion yuan ($1.47b) loan to fund its global growth from Export-Import Bank of China last December. “We were also granted the flexibility of a credit line by the bank,” Yin added. Knowing that Gasgoo is owned by Chery is adding extra credibility to that story.

“Volvo is the most solid brand compared with other brands the Detroit automakers have put up for sale,” said Yankun Hou, industry analyst with Nomura International. “It could be a big help for Chinese automakers who lack core technology but seek to climb up the ladder.”

As for Chery’s credit line, Nomura’s Hou said: “I think Chery is able to get more money if it will indeed go ahead with a bid for Volvo.”

Chery is one of China’s most aggressive exporters. They have sold their self-developed cars to more than 50 countries, mostly in the developing world. Chery’s been seeking to tap mature markets. An established brand, especially one with a strong safety cachet, might perform miracles on Chinese offerings.

According to Reuters, “the tables have turned for Detroit’s automakers.” Earlier this decade, GM, Ford (kind of), and Chrysler (haphazardly) scoured Asia for automotive bargains, capitalizing on the region’s financial crisis to snap up assets at fire-sale prices. Lately, especially GM used China’s growth machine to make their anemic numbers look good.

Now, Detroit automakers have reached out to Asian automakers to sell their unwanted and unloved brands. “They could be the buyers of last resort, the only ones left with a good bank balance, for now,” said Larry Rinek, automotive consultant at Frost & Sullivan.

“There is also a good chance the overtures will fail,” says Reuters. “The global recession, tight credit and sinking auto sales make any auto asset an extremely tough sell, and Asian automakers have also been forced to scale back production and investment.” But it doesn’t keep them from trying. According to Reuters, Ford has reached out to several Asian companies including Hyundai, SAIC, Geely and Chongqing Changan Auto, about its Volvo brand.

Executives of Kia, led by Kia President Eui-sun Chung, have had discussions with GM over the Saab premium brand.

Last year, Chrysler talked to companies including Renault-Nissan and Hyundai about its Jeep brand or other assets before reaching a pending deal with Italy’s Fiat.

GM and Ford say they have had contact with potential bidders for Saab and Volvo, respectively, but have declined further comment.

In addition to Saab, GM is trying to sell its Hummer SUV line and is reviewing its Saturn brand. Chrysler claims it has three bids for its Viper sports car business.

Reuters: “The wide-ranging talks between Detroit automakers and their Asian counterparts show how the balance of financial power has shifted in the industry over the past decade.”

Things got so bad that Chinese companies may even get what they want for a price every Chinese company would love: “With private equity firms in retreat, analyst say the industry’s distress has opened the way for more transactions that could involve little or no cash,” says Reuters, reminding the world of the deal between Chrysler and Fiat.

There’s a certain raw satisfaction to be had in seeing a man go utterly, completely mad in public, particularly when there’s a plateful of free bacon in front of you and an attentive server standing behind you, ready to swap your newly emptied bacon-plate for a full one at the slightest, Sotheby’s-private-bidder-esque, wave of a hand. This happy spectacle was available to all and sundry at the media breakfast that opened the 2009 Chicago Auto Show yesterday morning, courtesy of Hyundai’s American CEO, John Krafcik.

“Let me start my short comments today with a pair of quotes from two great Americans,” Krafcik opened. “Thomas Jefferson said that a government big enough to give you everything you want, is strong enough to take everything you have . . .

“For example, it’s difficult to put a finger on exactly when China moved from a purely Communist country, to an energetic proponent of a new form of capitalism.” The statement led one colleague to wonder aloud whether that “new form” included the “energetic” harvesting of organs from members of the Falun Gong. Another one observed, “If this guy’s lucky, nobody back home cares enough to translate this speech into Korean.”

The irony that the Chinese government is strong enough to take everything that South Korea has seemed utterly lost on Hyundai’s senior American executive.

But before anybody could stop chewing their bacon long enough to ponder Krafcik’s iffy grasp of the geopolitical scene, he dropped all remaining un-dropped jaws by stating that “change” called for “a more equitable distribution of income.”

The steady susurrus of surreptitious cell-phone use and side conversations came to a crashing halt as various members of the Midwest Automotive Media Association, the folks who traditionally host the Chicago morning breakfast, started nervously catching each other’s eye, wondering exactly who made the decision to invite Chairman Mao to speak at this event.

Having swiftly disposed of the American way of life in just a few opening paragraphs, Krafcik got into the real meat of his speech: a two-fisted attack on the “industry” and its “greed.”

“Turning our industry around will require some revolutionary thinking,” he said. And to prove it he went to declare that Hyundai would meet a fleet average of 35 miles per gallon by 2015. “A bold position perhaps, but we were honestly surprised to be alone amongst all automakers in taking a position like this one. Going forward, we’d love to have some company here.”

This “bold position” was revealed, in post-speech questioning, to be anything but: Hyundai will have a “Sonata-class hybrid” in 2010. But Krafcik was quick to assure the audience that the fleet average would come from “downsizing engine packages, taking weight out of the cars, a thousand little things.”

In other words, a provider of relatively crappy little cars is going to make more crappy little cars, with smaller engines and aluminum decklids.

[It’s worth noting that this “revolutionary thinking” actually dates back to when Lee Iacocca unveiled the Plymouth Horizon “Miser,” a car which had been so ruthlessly optimized towards 50mpg on the highway that they had, apparently, left the final “y” off the nameplate.]

With this not-entirely-revolutionary disclosure, Krafcik returned to his Timberlakian mission of bringing Trotsky back by suggesting “a more inclusive form of capitalism” in which executive salaries would be limited to a certain multiplier of average pay. It was not immediately clear as to whether this form of capitalism would be exactly like that exciting new Chinese form to which he had referred earlier, but if I were a member of an obscure religious sect in America right now, I’d be counting my kidneys.

Last but not least, it was time for some bragging.

Hyundai has managed to increase both market share and sales in the past few months. Lest anyone think that this was a simple matter of newly impoverished consumers buying cheaper vehicles, Krafcik took some time to lavishly praise the “Hyundai Assurance” program.

“The Assurance Program did not require government support. But it has delivered benefits to all stakeholders, and to society . . . This is how private enterprise should work. Somewhere, Thomas Jefferson is smiling.”

And why shouldn’t he smile? After all, Hyundai is on the way to becoming an American company! “The lines between domestic and import will become increasingly blurred. We will exercise more sensitivity, more discipline, and be more inclusive, in all aspects of our business.”

Having unintentionally closed an insensitive and undisciplined speech by calling for sensitivity and discipline, Mr. Krafcik allowed the media to finish their bacon and stumble, blinking, into the light of McCormick’s million-plus-square-foot arena, wondering what the hell they’d just heard.

I reckon Mr. Krafcik chose the wrong Thomas Jefferson quote. The one that comes to my mind: “He who knows best knows how little he knows.”

GM’s ex-Vice Chairman of Global Product Development left on a sour note. Bob Lutz claimed America is a nation that hates its own auto industry. It’s a remarkably nasty remark that’s almost as paranoid as it is insensitive. But not quite. The truth is much more specific and the other way around: GM executives hated their own customers. Why else would they have treated them with such contempt, selling them non-competitive products and inflicting such abysmal dealer service? (Heard the news?) Never mind. GM has built some tremendous enthusiasts’ cars: Corvette, G8, CTS and more. And now, the U.S. auto industry in general is about to experience a convulsive, cataclysmic change. Is that a good thing?

Where the future of automobiles is concerned, we, the American consumer, have become hostage to fortune. In any hostage or abuse situation, there will be some victims who come to identify with their captors. It’s no surprise, then, that some enthusiasts have reacted to the industry’s impending collapse by adopting the words, attitudes and beliefs of our “captors” in the worlds of finance, business and government.

Across the Internet, even here among the B&B, people are responding to this crisis, not as enthusiasts, but as craven cowards who believe that appeasement of, and identification with, those captors will somehow “save us” from what lies ahead. In doing so, these people are not only betraying their fellow enthusiasts, they are ignoring their own self-interest in favor of ephemeral, dimly understood goals.

Consider, if you will, the oft-repeated canard that “cutting brands, product variety, and dealership presence is a good thing.” For whom, exactly? Every time a manufacturer cuts a brand, thousands of enthusiasts are denied the chance to buy the car they really want. You may not have been an Oldsmobile fan, but somebody was, and that person can no longer purchase a new Oldsmobile.

Here on TTAC and elsewhere, pistonheads are ruthlessly cheering-on the death of Pontiac.  But what about the people who have driven and loved Pontiacs all their lives? Are “they” less important than “we” are? Are we superior to them because we don’t like ribbed lower-body panels or superfluous eyeball vents?

When our favorite brand, whether it be Porsche, Lexus, or Hyundai, falls under the knife in the future, will we find it as ironically amusing as the death of “the excitement company”? Where has our empathy for fellow enthusiasts gone?

What about cutting product? The business press applauded when Chrysler cut the Dodge Magnum from its lineup, but why did we?  How can reducing choice be a good thing? Sure, it may make business sense, at least according to the wizards of Wall Street. But who here values a number on a balance sheet more than a rip-snorting, tire-smoking Magnum SRT-8? I continually read members of the B&B talking about how a particular product needs to be “put to death.” Where’s the fun in that?

Here’s another slice of reality for you: when dealership counts dwindle, the customer suffers. The primary reason Honda and Toyota hold retail price levels better than the Detroit competition isn’t the excellence of the product. Rather, it’s the lack of intra-dealer competition, plain and simple. When dealers compete, to paraphrase the TV ad, you win.

I cannot think of any reason for anyone outside Wall Street to want a reduction in operating dealers. Trust me on this: unless you have a seven-figure investment in an auto company, you stand to gain more personally from saving money on a new car than you do from some stock-price bump resulting from closed doors at your local Ford store.

The facile response to every concern I’ve raised above is always “Toyota.” Toyota doesn’t maintain superfluous brands. (Except, um, Scion.) Toyota doesn’t pamper enthusiasts with money-losing models. Toyota doesn’t have enough dealers to result in bare-knuckle newspaper-ad price wars. Toyota holds its nose, curbs its enthusiasm, and sells more cars than anyone else in the world, primarily to people who hate cars.

Unless you’re a major Toyota stockholder, however, this doesn’t help you one bit. The companies that do go out of their way to connect with you, the automotive enthusiast . . . well, they may be irrationally exuberant, they may not always show a nine-figure profit, and once every so often they may require a helping hand. But they are on our side.

The bankers don’t care about cars; they care about money. The government, in general, hates automobiles and everything they represent. The mainstream media finds automotive enthusiasm to be amusing at best and despicable at worst. Who’s on our side? Who’s trying to provide exciting cars at affordable prices?

Answer that question for yourself, honestly, and then see if it doesn’t affect your attitude towards everything from gas tax to the much-derided bailout. Stop being ashamed, stop loving your tormentors and aping their discourse. The future those people envision—an endless series of identical, zero-impact crapwagons shuffling in a low-speed line down a carpool lane to nowhere—may be good for business, but it’s bad for us.

As the maximum era draws to an end at GM, there’s no shortage of praise for the Bob Lutz-led product turnaround. Cars like the CTS, Lambda CUVs and the Chevy Malibu are said to represent a new day in quality and design for the General. And without a doubt, they are all consistently better cars than GM has made for years. But for all their accolades and fawning reviews, these vehicles actually represent a relatively small fraction of GM’s offerings. Though marketing executives wail from the Renaissance Center that consumers aren’t understanding the alleged sea change in GM products, there are still more GM vehicles you can ignore (to borrow GM’s marketing phrase) than you can’t. Automotive atavisms occupy GM’s entire lineup, but the contrast between Chevrolet’s D-segment offerings, the Malibu and Impala tells the whole story. And it isn’t pretty.

It’s no coincidence that the Malibu is, above all others, the poster child for a GM turnaround. Its clean styling and high-quality interior give it an edge in the first impressions game that GM hasn’t enjoyed in decades. More importantly, it brings an impression of actual effort to the crucial mid-sized segment, a category that was long ago ceded to the CamCord legions by such W-bodied luminaries as, well, the Lumina.

But the W-body and its parts bin of horrors lives on. Though the “Malibu Classic” has gone to the great rental lot in the sky, the Impala remains a rolling reminder of a time when the term “GM midsized” meant cheap, bland and unreliable. GM’s current fleet queen boasts a shake, rattle and roll interior, with all the aesthetic delights of a cheap pocket calculator. And let’s not even discuss the old-school wallow that the Impala calls handling. Place the Impala and the Malibu side-by-side and the contrast in impressions couldn’t be greater.

And yet, the Impala sells far better than the perception gap-changing ‘bu. In fact, the Impala is by far GM’s best selling car, with 265,840 sales last year. That’s more than the entire Pontiac car lineup, and nearly the volume of Saturn, Buick and Cadillac cars put together. The Malibu is well behind with 178,253 units sold last year, despite relentless hype and giant ad budgets.

Of course, none of this should come as much surprise to the experienced GM watcher. It is, after all, a long-standing GM tradition to offer long-outdated models as a cheap fleet sale booster. But not only is GM supposedly trying to cut back on fleet sales, unlike the Classic before it the Impala actually sells at retail too. Oh yeah, and GM has been propping up Malibu sales with fleet deals as well.

So while publicly denouncing fleet sales, GM is keeping its fleet queen in the public eye by keeping the roomier Impala’s retail price relatively close to its marquee Malibu. So when shoppers arrive at a Chevrolet dealership to look at the mid-sized offerings, both sides of General Motors are there to see: the sleek (but snug) Malibu or the roomy but dismally old-school Impala. And if you work with the best fleet percentages we have for 2008 (about 50 percent of Impala sales and about 33 percent of Malibu sales went to fleets), it turns out that more people are buying Impalas, even at retail.

This raises a number of interesting questions about the value of GM’s supposed product-led turnaround. If the Impala sells better than the Malibu at retail, despite its aged underpinnings and staid looks, was Bob Lutz’s enormous paycheck and frequent outbursts worth the investment? Class-competitive styling, interiors and platforms cost a considerable amount of money, and based on the numbers it seems that loyal GM customers aren’t particularly swayed by them. For all its accolades, the Malibu looks to be not only less popular than its fleet-flooding cousin but less profitable too.

And so we arrive at the real question: why do GM customers seem to prefer the aged and uncompetitive Impala to its acclaimed Malibu? In his hilarious address to the White House Press Club, Stephen Colbert quipped that President Bush’s 30 percent approval rating meant that though the metaphorical glass is only two-thirds empty, the last third is usually backwash. And the implication that Bush’s constituency represents all the ugly stereotypes of American culture also applies to GM’s midsized predicament. After decades of foisting uncompetitive cars on the American public, choosy shoppers no longer even consider GM a source for high quality vehicles, a fact proven by KBB’s 2008 “most researched” list.

And as long as Impalas and Malibus share lot space, GM’s cries of “perception gap” will continue, as the brand image is confused by two such divergent approaches to the midsized segment. The Malibu is fighting an uphill battle to convince now-loyal Toyota and Honda customers that the bowtie brand can offer quality, and sales momentum isn’t helping. And with GM pricing a fleet version of the Malibu considerably cheaper than the Impala, it’s also only a matter of time before that model loses its luster to the fleet residuals curse. And since its sales and profitability are already worse, the damage has already been done.

Bob Lutz was not the worst thing to happen to General Motors. He was the second worst thing after CEO Rick Wagoner. Lutz’ legacy will not be the critically acclaimed vehicles attached to his name: the Cadillac CTS, Buick Enclave, Chevrolet Malibu or Pontiac G8. It will be the fact that GM’s vice chairman of global product development annihilated whatever remained of GM’s brand-related equity. Bob Lutz ran General Motors into the ground.

Lutz’ career at GM proves the old adage that if you are not part of the solution, you are part of the problem. Oh hell, Lutz was the problem. Within weeks of Lutz’ elevation to Car Czar, TTAC sounded the alarm. In one of his earliest interviews, a reporter asked Lutz about Volkswagen’s prospects. Astoundingly, GM’s Car Czar couldn’t name more than three of VW’s brands.

While you might expect the identity of the German automakers’ divisions to catch out a pistonhead at a pub quiz, Lutz was the newly-appointed head of development for the world’s largest automaker. If Bob Lutz didn’t have mental access to this type of competitive information, how could he possibly craft a coherent strategy for GM?

Lutz apologists flew to his defense. This quickly became a habitual practice. In subsequent years, the automotive media focused its attention on Lutz’ mal mots: his allegedly recidivist views on the auto industry’s place within society. The so-called “crock of shit” problem was actually thinly-disguised admiration.

The press painted Lutz as the straight-talking, cigar-chomping representative of an earlier time, a time when V8 engines—and GM—ruled the earth. And they loved him for it. What the media missed: how often Lutz’ opinions about the car business were ill-informed, misguided and just plain wrong.

This is the hugely compensated automotive executive that today called the Pontiac GTO “my proudest accomplishment.” After all, “That’s the car that got us convinced that we could use the global product development scheme. Up until then, no one had tried anything like that.”

Maximum Bob is, once again, flat out wrong; the “world car” idea is as old the auto industry itself. Worse: the Australian-built GTO was an abject failure. The GTO lost GM tens of millions of dollars, squandered precious development resources and drove yet another Lutz-shaped nail into Pontiac’s coffin.

You could, however, make the case that the GTO was the quintessential Lutz-mobile: a romantic expression of his personal taste that fell flat on its face. A product that Lutz quickly abandoned in search of . . . the next big thing. Wash. Rinse. Repeat. For models within brands AND the brands themselves.

Lutz never developed anything remotely resembling a coherent, focused and determined product development strategy. Automotive Attention Deficiency Disorder characterized Lutz’ tenure. Everywhere you looked, GM under Lutz was a company typified by frenetic indecisiveness. The rear wheel-drive Zeta platform program was on-again, off-again no less than seven times.

In 2005, Lutz described Buick and Pontiac as damaged brands. The media thought it a “come to Jesus moment,” withdrawn to serve GM’s PC PR needs. But it was Lutz himself who had damaged the brands. And it was Lutz who continued to kick the brands when they were down. Lutz was guilty of sins of commission (a staggering stream of badge engineered mediocrity) and omission (a singular failure to define a profitable brand remit for ANY of GM’s divisions).

Lutz’ epic incompetence was matched only by his swagger and bravado. His enablers ate it up, adding to Maximum Bob’s egomaniacal ignorance. The fact that the media perpetuated Maximum Bob’s nickname without irony—a moniker I invented in a moment of disgust—shows you the kind of bubble that protected and extended Lutz’s befuddled sphere of influence.

Although, saying that, one wonders how much power Bob Lutz actually held within the loony labyrinth of backstabbing RenCen bureaucrats that is General Motors. Did Lutz argue for the Chevy Traverse or just let it happen? Did the Powers That Be appease Lutz with his pet projects (e.g., the Pontiac Solstice) so they could do whatever they wanted to maintain the dysfunctional status quo upon which they depended?

There is no question in my mind that Bob Lutz’ resignation was motivated by personal greed. Let’s not forget Lutz’ reply to the [first] suggestion that he take a haircut to show his devotion to the team: “I already gave at the office.” By stepping aside now, the man who scoffed at the question “Is your pension bankruptcy proof?” is making damn well sure it is.

Like so many failed American executives, Lutz will not personally suffer for having ruined the livelihoods of tens of thousands of his underlings. He will sleep well, eat well, travel luxuriously and, worst of all, continue to receive the respect of his peers. He doesn’t deserve any of it, as history will one day decide.

TTAC proofreader and Editor Jeff Puthuff has been helping me chase down the Chrysler–Cerberus story, trying to identify the automaker’s secret co-investors. In the midst of that pursuit, Jeff has unearthed this heretofore unreported document: “U.S. Motor Vehicle Industry: Federal Financial Assistance and Restructuring” Dec. 3. 2008 (Prepared for Members and Committees of Congress).” The Congressional Research Service (CRS) drafted the report for elected representatives contemplating whether or not to loan Chrysler and GM money to prevent their bankruptcy. The U.S. Senate and House of Representatives eventually failed to create a bill to fund the loans (though not for lack of trying). Then-president Bush stepped in at the eleventh hour and provided $17.4b worth of federal loans, by stretching the provisions of the Troubled Asset Relief Program (TARP). There are some startling—and not so startling—insights.

Widely quoted Center for Automotive (CAR) Research Study Debunked, Rejected

A general criticism of this analysis is that it assumes that the suppliers and all other automakers, aside from the the initially failed company or companies, would see their output drop to zero, and that they would be merely passive observers of an industry collapse. There are many examples in recent years of bankrupt or financially distressed suppliers being supported by their OEM customers, or by other suppliers that acquire parts of the business to gain new contracts or to be able to continue servicing their own contracts from a failed subassembly producer…

While CAR posits, for the sake of analysis, that, in the first year, no auto manufacturing in the United States could survive a major Detroit 3 bankruptcy, in actuality, such an extreme outcome is unlikely. Immediate and radical restructurings among suppliers is a more likely outcome, and other brands would continue to produce.

U.S. Auto Manufacturing Employment Declining Generally, Anyway

Automotive manufacturing employment has also fallen as a share of total employment in manufacturing. While total manufacturing employment has fallen by more than three million jobs since September 2001, employment in motor vehicle manufacturing dropped at an even faster rate, with its share of total manufacturing employment falling from 7.4% to 6.4%. During this period, total automotive sector employment, including services fell from 5.1 million to 4.6 million, while total U.S. employment grew by six million. As a result, automotive employment, including both manufacturing and services, as a share of total U.S. employment, fell from 3.9% to 3.3%.

GM – Chrysler Shotgun Marriage Still An Option

GM’s plan to acquire Chrysler and merge the two companies, which was widely reported in October 2008, was similarly withdrawn when the companies could not find sufficient funds, including proposed federal financial support, for the deal. The plan could still be resurrected as part of a general plan of government financial assistance for the Detroit 3.

Chrysler / GM Chapter 11 Could Increase Consumer Confidence

One might question whether the recent urgent requests for financial assistance do not diminish consumer confidence at least as much as would a bankruptcy filing designed to reorganize the company and lead to financial viability . . . filing under Chapter 11 could boost consumer confidence in the troubled automakers.

Feds Could Back Vehicle Warranties

If Congress finds that concern about warranty coverage is an issue that would doom a reorganization, it could be possible to provide for alternative warranty coverage. This might be funded with premiums paid by automakers, similar to premiums paid by financial institutions to the Federal Deposit Insurance Corporation (FDIC).

Loan Default Risk

However, direct loans from the federal government commit government money more immediately than would loan guarantees. Several have questioned the advisability of extending such loans, fearing that the troubled automakers may be unable to repay them even if the loan terms are very favorable.

Loans Could Leave Federal Government SOL

Under current bankruptcy law, the loans, if unsecured, would enjoy no priority status under 11 U.S.C. § 507. This means that the government potentially could “stand in line” with the other non-priority unsecured creditors and ultimately might receive only a few pennies for each dollar of outstanding loan balance. In the worst case, there might be no funds to divide between these creditors.

Chrysler Pension Plan Funding Unknown

As a privately-held company, Chrysler is not subject to the same SEC reporting requirements as are GM and Ford. Current information about pension plans was not available at the time this CRS report was written.

Loans Less Onerous Than Previous ChryCo Guarantees

By comparison to the broadly defined elements of these plans, the Chrysler loan guarantee legislation of 1980 was far more prescriptive in exchange for a loan guarantee that was worth far less than the $25 billion requested by the Detroit 3 in 2008, even allowing for inflation.

Clearly, the U.S. Congress had enough information to know that providing GM and Chrysler with federal loans was an extremely risky not to say stupid idea. As did President Bush. By making these loans, the president pushed “the Detroit problem” down the line to president-elect Obama.

The bottom line: adding more fuel to Chrysler and GM’s pyre is just as boneheaded now as it was then.

Rolls-Royce used to advertise the fact that their cars were so quiet that the loudest sound you heard was the [analog] clock ticking on the dash. Who said the British don’t do hyperbole? As a quiet car connoisseur, I’d have to say a Clinton-era Cadillac provided the quietest ride I’d ever experienced; if the time was one of peace and prosperity, then so was the car. Nowadays, automakers are telling us that their cars are quiet, or at least quieter than ever before. I’m not buying it. A number of recent drives have been notable for their aural uncouthness. So I set out to find the truth about automotive sonic signatures. Has nostalgia dimmed my memory (if not my hearing)? Is progress on the noise suppression front been less impressive than industry propaganda would have you believe?

The German buff book Auto, Motor und Sport recently opened its archives to tightwads. I’ve spent a few hours perusing the decibel stats. To save space, the table I’ve compiled only deals with interior noise at about 80 mph (130 km/h). It’s a civilized speed (at least here in Germany) at which one would want to be able to hold a civilized conversation, even with a back-seat passenger.

Car and model year Interior noise in dB(A) at 80.78 MPH

1995 BMW 728i 66

1995 BMW 523i 66

2003 BMW 730i 66

2009 BMW 330d 68

2009 Mercedes C350 CGI 68

2009 Renault Megane dCI 69

1996 Mercedes C280 69

2008 Mercedes C250 CDI 69

1996 Citroen XM V6 69

1995 Audi A6 2.8 69

2006 Mercedes E220 CDI 69

2006 BMW 520d 69

2000 Ford Mondeo 2.016V 69

2009 Ford Mondeo 2.5 Titanium S 70

2006 Audi A6 2.7 TDI 70

1996 Mercedes E230 T 71

2003 Toyota Camry 2.2 71

2009 Toyota Auris 2.0 D-4D 71

1995 Honda Civic 1.5i VTEC-E 72

2009 Honda Civic 2.2i-CTDi 72

2002 VW Golf 1.9 TDI 72

2009 VW Golf 2.0 TDI 72

2009 Opel Astra 1.9 CDTi 72

1996 Opel Astra 1.6 16V 73

2003 Toyota Corolla Compact 1.4 73

2009 Porsche Carrera 73

1995 VW Golf Cabrio 1.9TDI 73

1996 Ford Mondeo 1.8GT 73

1995 VW Golf CL 1.6 74

1995 Mercedes E230 74

2000 Toyota Corolla 1.6 76

2009 Ford Ka 76

1996 Renault Megane 2.0 16v 76

In some market segments (e.g., executive cars), you have to ask: where’s the progress? What, for instance, has BMW been doing since 1995? Most cars have gotten much heavier. You think that the extra heft might include some extra soundproofing. But plenty of today;s lumbering leviathans are hardly quieter than their sprightlier predecessors. What does Mercedes expect us to think about zero improvement for the C-Class in twelve years?

VW’s press release for its newest Golf calls it “the quietest Volkswagen Golf since the model series began” characterized by “first-class acoustic properties.” Yes, “a special sound-damping film in the windshield reduces driving noises, as does the newly developed seal design on the doors and side window guides.”

Significantly less wind noise is generated by the outside mirrors due to their new shape. Furthermore, special modifications were made to better isolate the engine and passenger compartments from one another acoustically. Quiet rolling tires and new engine bearings round out the noise reduction program.

Empirically, the new Golf offers an improvement of 2 dB in three car generations and thirteen years.

Small cars have gotten much better, though. Corollas and Renaults used to be noisy boxes. Intense competition in the compact field seems to be working its magic. The Auris (the more-advanced, Euro-market Corolla) is a quite soothing small car, and the Megane’s low level of noise is a marvel.

Really small cars, like the Fiat Panda or the Ford Ka, are still noisy, and are thus for me un-purchasable vehicles, since they (driven quickly) generate a clamor louder than Occupational Noise Exposure standards would allow.

A noise level of 70 dB(A) seems to be hard to crack in cars for regular folks. But this is, to my mind, a pretty tolerable loudness, unreachable a few decades ago.

You’d think with advanced computer firepower, more precise manufacturing tolerances, double-lip door seals and multi-laminate windows, cars would generally be much quieter than in the 1990s. Why aren’t they? Remember one dirty secret of the car industry: usually, each successive generation of a car is cheaper to manufacture. Cost-cutting means that progress is slow—unless the market actively demands progress.

Or unless the car maker is genuinely forward-thinking. In terms of quietness, the only revolutionary car in recent years may be the Lexus LS 600h, which claims 60db at 60MPH.

On the other hand, where are the technical advancements we’ve been waiting for? Active noise cancellation, once seen as the answer to all things cacophonous and found in Honda’s cylinder de-activating Odyssey minivan, seems to be a pipe dream. This despite the fact that BOSE et al. have been promoting its benefits for years, and Germany’s Fraunhofer Institute says it’s working on a useful system.

And what about a microphone-based, user-friendly and effective interior intercom? I’m tired of shouting at back-seat passengers (although it can be useful in the case of children, dogs and back-seat drivers). A car that used electronics to help you converse with everybody on board, without raising your voice: now, that’s something that would lead me to a showroom, and to ponder a purchase.

Redflex is the Australian company that runs many if not most of America’s red-light camera programs. Although I’m not a city resident, I attended two Redflex Q&A sessions in Canton, OH over the past two nights. About twenty people attended the first meeting. Around sixty showed up at the final of four meetings—once people caught wind of what was at stake. All of the meetings included city council members, city safety director Thomas Nesbitt and Hizzoner the Mayor, William Healy. Redflex’s Executive Vice President Aaron Rosenberg began the first meeting with the video above. The clip was shown without warning. Hello and boom: a graphic and violent accident of the type Redflex’s cameras are supposed to prevent. No emotional blackmail there, then.

Rosenberg claimed the accident happened in Dayton, OH (it’s also featured on the company’s website). According to Rosenberg, the Chrysler PT Cruiser blows through the red in the curb lane doing 33 in a 35. This after the light had been red for 28.4 seconds.

As I slowly overcame the high-school-drivers’-ed-style shock of seeing a quick clip of carnage, I became increasingly angry and appalled. Why is it OK for a company selling safety equipment to use such blatant shock tactics to rally taxpayers to their for-profit cause? With aspiring teen drivers, you can understand the value of “tough love.” But while good profits may come from scare tactics, good governance does not.

Whose meeting is this anyway? By allowing Redflex to start the evening in this cynical, manipulative manner, Canton was revealing the truth: the fix was in. And then I started to dissect the accident. . . .

We were shown the brief clip of footage. Nothing more. No information on the cross-street speed limit. The Subaru was going plenty fast, but who knows if he was speeding?

The hapless pedestrian was strolling along across the street AFTER the cross-street light had changed to green. Doesn’t at least a small part of the blame rest on his decision to cross that street against signage? Cities and towns put up those Walk/Don’t Walk signals for a reason.

Also, did the pedestrian have a reasonable amount of time to cross?

I remember an article about an elderly woman getting ticketed for blocking traffic in a crosswalk. A TV crew investigated and found that a group of high school students couldn’t make it across the intersection before the light turned green at a dead run.

Furthermore, what exactly did Redflex’s camera do to prevent this accident? Ipso facto, nothing. Supposedly, Redflex’s systems reduce this kind of T-bone crash rate. But there’s no independent data on this for one simple reason: it’s not true.

In fact, red-light cameras are notorious for causing rear end collisions. While a spectacular crash like the one shown is particularly horrific, a large[r] number of rear-end collisions would lead to a large[r] numbers of whiplash cases. It’s a chronic injury that can literally ruin lives.

Last but not least, even if no T-boning accident had occurred, it looks like the SUV could have struck and maybe even killed the pedestrian.

To know the truth about this “instructive” incident, I would like to see the actual accident report and hear an analysis from a safety expert whose salary doesn’t depend on a red-light camera contract.

As those of you familiar with my screen name (SexCpotatoes) might imagine, I gave the city’s suits and the Redflex EVP a hard time, asking plenty of pointed questions. When pressed about Houston and Denver’s increased accident rate after red-light camera installation, Rosenberg responded “That was not our company.”

I asked city traffic engineer Dan Moeglin why his department hadn’t implemented any other safety measures: number boards that count down to red, synchronizing more traffic lights through town, or extending the yellow times. “I have all the traffic info about yellow light timing and such right here, I can go over them with you if you want, but these numbers give even me a headache.”

He also said that “yellow light duration is set by a formula taking into account speed limit, and width of the roadway.”

I briefly touched on the lawsuit against Redflex regarding the radar equipment they’d imported and distributed in violation of federal law. “That was an issue with a sticker not being properly placed or affixed,” Rosenberg demurred.

So a company devoted to catching motorists who must follow the letter of the law down to the last tenth of a second justifies breaking the law, perjuring themselves and falsifying certification documents as a clerical error. Nice.

I’m starting a petition to get the red-light camera issue placed on the ballot for the next general election. I leave it up to you, TTAC’s Best and Brightest, to decide whether using this crash footage to sell camera systems to greedy cities is morally reprehensible. Meanwhile, if you want to know why Canton is even entertaining this idea, I suggest you ignore the video and, as always, follow the money.

Reading GM’s FastLane Blog sometimes feels like watching the images generated by an underwater camera cruising through the Titanic’s sunken remains. Yes, I know, GM hasn’t cracked in two yet, never mind hit the ocean floor. But the blog’s extended periods of silence strikes this jaded journalist as, well, creepy. A sense of impending doom that’s also reflected by the editorial mix: half-assed attempts to address the key questions vexing GM’s “turnaround plan” (as bulkhead after bulkhead buckles under pressure), interspersed with exec-sourced, over-optimistic appraisals of GM’s prospects. And now, it looks like GM’s just given up, surrendering the floor to “resource analyst” Amory Lovins’ mob over at the Rocky Mountain Institute. Abundance by design™! ‘Cause austerity sucks, right?

The org’s 25-year-old Aspen-dwelling Bulldog-educated transportation consultant uses the platform (so to speak) to plug (so to speak) EV socialism (for real). Apparently, “It Takes a Village to Raise a Volt.” I said, Volt. Not Dolt. But I gotta say, I find the entire premise of Laura Schewel’s article pretty stupid.

I spend my every working (and sometimes every waking) hour trying to make the cleaner, greener promise of plug-in vehicles a reality. The barrier that keeps me up at night is not the high cost of batteries or if Smart Grid will happen. It is the fear that there simply won’t be enough plug-in vehicles soon enough to hit the greenhouse gas reduction targets we must hit. I believe that communities are the best bet for overcoming this barrier.

Consumers and automakers are in a chicken-and-egg situation: the uncertainty of consumer demand for a completely new type of vehicle makes it difficult for automakers to commit to plug-ins in significant numbers. This uncertainty, in turn, affects the building of charging infrastructure and other supporting technologies. This, in turn, creates uncertainty in consumer demand, and so on.

I don’t know about you, but I sleep better at night knowing that Laura is wide awake, helping GM add credibility to their electric/gas plug-in hybrid Hail Mary. I would however like to know exactly which greenhouse gas reduction targets “we” must hit. Kyoto? California? What? You would’ve thought GM would share my curiosity, but I guess not.

That said, you can’t blame them for sharing Ms. Schewel’s sense of urgency—assuming that GM suddenly understands what that phrase means. But who shares her sense that there’s some sort of techno-phobia re: plug ins? You use it like a normal car and plug it into a wall from time to time. The only uncertainty is how much it costs and whether or not the thing will run out of gas/juice and/or break. But Toyota’s got that sussed, one imagines. And, by extension (cord), GM. You know, eventually.

Oh, hang on. She means having lots of sockets available, right? So you can plug in at work or at the post office or something. We need a national plan! Just kidding, ’cause everybody knows that “making a comprehensive national plan will slow us down.”

Furthermore, the ingredients for plug-in success naturally vary from place to place, and a uniform U.S. approach would be a detriment to natural diversity. Of course, this community-based readiness approach should be paired with a national backbone of open plug and communications standards so that vehicles, products, and services can be operated on a national basis. The federal government should also provide funds for cities to implementing their plans.

As Mater from Cars famously opined, you hurt your what? You plug your plug-in into a socket, right?

As far as I know, I don’t need a converter for my shaver when I travel around this great nation of ours. If the plug-in electric vehicles of Toyota—I mean, tomorrow need some special big ass socket, well, let them sell me one. If an apartment complex needs a dozen or so, let them charge their tenants for the privilege of plugging in, tuning out and paying rent. If I’m at the post office needs one, forget about it. I’ll plug in when I get home. Next?

Nope. Ms. Schewel considers this one of those “stakeholder” deals. Which, to me, is the sound bite of my tax dollars flying out of my wallet.

These stakeholders [lots of bureaucrats, ‘natch] must create a coordinated, multi-year plan that makes owning a plug-in better than owning a traditional car for the first local adopters. We’re developing a long list of ways to do this. A few of my personal favorites: a “plug-in” concierge call-in service for all owners; federal and local incentives bundled at the dealer for immediate cash back; special parking spots; free electricity for your vehicle.

Didn’t the Soviet Union have a little bother with all their coordinated, multi-year plans? If I recall, they were a communist dictatorship at the time. I know the Earth is warming, but can anyone understand my gut instinct: let’s not go there?

Surprisingly, Schewel’s GM-promulgated propaganda doesn’t end there. For me the segment title “How Much is Enough?” pretty much answers itself. But for Schewel, the sky’s the limit. Or should it be “this guy’s the limit”?

President Obama’s goal of 1 million plug-ins by 2015 is not a revolution either. We need millions upon millions of plug-ins (coupled with smarter land-use planning to reduce driving, and huge investments in public transit).

Me? I need a drink.

Here’s a surprise: American cars hold their value much better than other major markets, including Japan and Europe. Cost of ownership is the culprit. In the US, owning a car generates relatively little in the way of year-to-year expenses. Registration is usually about $30. Inspections are infrequent and rarely costly. While the repairs required to keep a “beater” on the road can reach four figures, they rarely exceed the value of the vehicle itself. As a result, it’s unusual to see a used vehicle in America (even “heaps”) listed for sale under $1k. Also as a result, the cash-for-clunkers proposals, as envisioned, are a horrible idea.

In an effort to boost sales, the German government has been running a “cash for clunkers” program. The government is offering 2,500 Euros for any eligible old car traded in towards a new car purchase. After some initial cheering, the program has been leaning toward scandal land. The reason for this nexus: gaps.

Gap number one: used car values. Overseas, licensing and stringent test regimes make the cost of auto parts a far more daunting proposition than it is in The Land of the Free. Tax laws favoring company/fleet purchases create [even] dramatic depreciation for mass market models. These factors mean that the market value of a “tradable” used car is much less than it’s “government” trade-in value.

The other gap—and the source of many of the “issues” surrounding the cash-for-clunkers program—lies between a car’s “inflated” trade-in value and the cost of a new car.

At best, the money garnered from the government for a clunker represents about a 25 percent down payment on a new car. That’s at the low end. For a more middle-market car, the clunker check accounts for less than 10 percent of the cleaner, greener machine’s purchase price. On top of that, the sort of person who would be buying a €10K car is the one least likely to get financing to close the “gap”.

The sharp end solution to this gap is simple: People who can afford new cars will buy (from a private owner) a “junker” to trade. The junker’s former owner will take a fee (maybe 1000 Euros) and use the money to buy a non-tradeable old car. Hopefully a better one, but not necessarily.

Despite/because of these economics, it seems that everyone wins (and the old cars get taken out of circulation). In practice, no.

The biggest problem with Germany’s cash-for-clunkers program: it takes something that is normally not very valuable (a German jalopy) and increase its value several-fold by attaching a couple of documents. Throw in the fact that the money “pool” supporting the program is “first come, first served,” and you get fraud on an impressively large scale.

TTAC’s Bertel Schmitt has been connecting the dots between the environmentalists’ and the mob’s green dreams. Apparently some of the trade-ins are doing it the Chicago way (early and often), and aren’t even getting scrapped. This makes a mess of the real purpose of the program (culling clunkers), while doing nothing to increase sales (the spoonful of sugar to make the green stuff go down easier).

It’s a stark warning to Americans contemplating the wisdom of the whole cash-for-clunkers concept. But is the devil in the details? Could CforC be done “properly”?

First, you’d need to make the scrap credit what it is: a simple payment above salvage value to take a heap off the road. Second, you need to make the payment lower (say $1,500 or even $1,000). Third, you need to extend it to ALL eligible vehicles and run it through salvage yards (therefore only one set of books to check).

In effect, the goal would be to get “heap” drivers into a slightly newer, slightly nicer “heap.”

Aside from aesthetics and a marginal pollution reduction, the greatest benefit would be to reduce the total vehicle population on the road. This will eventually help the new car market but not for a few years and not for the reason you’d think.

While new vehicle sales had been running high until last year, the “scrap rate” has held steady at about 12.5 million a year for the last decade. Sales have far exceeded that rate; that is one reason the US has 250 million cars for 200 million licensed drivers.

A targeted cull would aim to increase the scrap rate, to 15 million annually. Make no mistake, doing it right would not be cheap, I reckon $5b dollars a year (3.5 million times $1,500) ought to do it.

Reducing the absolute number of cars would help heal the damage years of “fire sales” have had on used car prices. Getting used car prices back near “normal” would help sales down the road. But would it be worth the cost? In Bailout Nation, cost owns you.

Ever since bailout measures for the auto industry were first mooted, free market detractors whispered “WTO.” Nobody took it seriously. True, according to the World Trade Organization’s rules, direct subsidies are not allowed. But it’s equally important to note that the 153-member quango has never put a single issue to a vote since its birth in 1995. Consensus governance means that as long as nobody complains, and especially, as long as everybody plays the same game, the WTO hangs fire on principle. Auto industry loans? They’re all doing it. Still, there is a line a WTO member mustn’t cross. And America almost crossed it.

Recent amendments to Uncle Sugar’s near-as-dammit trillion dollar economic stimulus package would require US firms to use local steel and other components in state-funded projects. The provision kicked sand in the face of the WTO’s raison d’être: the most favored nation (MFN) rule.

Under the terms of the MFN rule, a WTO member must apply the same conditions on all trade with other WTO members. The provision also applies to trade within and without a given nation. “Imported and locally-produced goods should be treated equally (at least after the foreign goods have entered the market).” To do otherwise constitutes blatant protectionism.

Similar buy local protectionist measures have been adopted or considered in Argentina, China, Indonesia, Ecuador, India, Russia (re: imported used cars) and Vietnam. All seven WTO member nations have landed on a WTO ­surveillance list.

The Guardian writes that the European Union (EU) is pissed with the “buy American” bailout provision. They’ve threatened legal action and retaliatory measures against the US if the Obama administration enshrines this clause in its multibillion-dollar economic stimulus package. Brussels said it could take the US to the World Trade Organization for breaching treaty rules.

The warning came just a day after Joaquín Almunia, EU economic and monetary affairs commissioner, pointed to “clearly protectionist measures” emanating from Washington. The EU ambassador to Washington has expressed similar concerns. A spokesman for Lady Ashton, EU trade commissioner, said: “If the provisions that are finally passed by the US Senate and approved by President Obama infringe the provisions of the GPA [general procurement agreement], to which the US is a signatory, then this is something we will have to consider taking them to the WTO over.”

Compared to previous hints and “concerns,” this amounts to a barrage of warning shots. Amid fears that the US and other countries could trigger a disastrous 1930s-style “Great Depression” trade war through protectionist blocks on trade, the European commission highlighted similar moves in Europe.

A French €10b aid program requires firms to source components solely from France, keep only the French plants open and scrap plans to “de-localize” jobs to elsewhere in the EU. Neelie Kroes, EU competition commissioner, will warn French ministers in talks in Brussels that state aid must not only comply with competition rules but also with EU laws on freedom of movement and capital. “They have to realize that once they start down that protectionist path it’s a descent into chaos,” her aides said.

On Tuesday, U.S. President Barack Obama signaled fear that Buy American provisions—supported by Democrats in steel-producing and economically distressed states—would trigger a trade war at a time when the global economy is in dire straits.

On Wednesday, lawmakers voted to soften the controversial “Buy American” provisions in the proposed U.S. economic stimulus package. The amendment, approved by the Senate, requires the Buy American provisions be “applied in a manner consistent with U.S. obligations under international agreements.” Which is like saying you can burgle a house as long as you don’t break the law.

The bottom line for carmakers: even if America’s avoided a trade war (for now), they can’t win.

If the feds restrict the bailout buffet to The Big 2.8 and domestic production, they run the risk of retaliatory measures from neighbors—and markets—around the globe.

And don’t forget it’s a small world after all. In the run-up to the meltdown, Motown’s automaker practically demanded that its suppliers outsource abroad. By now, keeping the suppliers’ share of the domestics’ business within U.S. borders will be more about spin than compliance. Especially if those suppliers receive their requested $20.5b bailout.

On the other hand, if the feds don’t limit their largess to domestic producers, they run the very real risk of alienating whatever voter and/or union support exists for the pork barrel parade. A billion dollars of TARP money for Brazil? Esqueça-se.

On a practical basis, a truly “fair” bailout would put the domestics at a disadvantage.

Think of it this way: the existing Chrysler loans are equivalent to a current subsidy of $10k per vehicle sold. If, instead, you offered American car buyers $10k off a car, they wouldn’t buy a Chrysler. Clearly, you couldn’t offer the discount certificate just to Chrysler buyers. What kind of country would that be? Welcome to Bailout Nation.