“Hi Mr. Baruth. First, I would like to thank you for the opportunity to assist you and please feel free to email or call me at the number provided if you have any other questions you need answered. I have a vehicle with a MSRP of $29,995. I can sell you that for $29,482.” Interesting. In the middle of the American automotive market’s worst implosion in living memory, what car could possibly be so valuable, so desired, so smoking hot that the maximum negotiating room possible would amount to an ungenerous five hundred and thirteen dollars off sticker? Give up? It’s a Pontiac G8. A 2008-model Pontiac G8. 

My first exposure to Pontiac’s Holden-by-any-other-name came at the San Diego press launch last summer, and I was so smitten that I permitted myself to be videotaped by the General’s PR flacks gushing incoherently about how the G8 “challenges the BMW 5er on home ground and carries away a win on value” or something equally inane. I also made a call from the hotel that evening to my younger brother, a multiple-Mazda owner and SCCA National Solo trophy recipient, suggesting that he investigate the possibility of buying one himself. I knew he’d been interested in the G8 from the moment the first photos appeared but had been waiting to hear the full scoop on the faux-Pontiac’s over-the-road capabilities. 

“Go ahead and buy one,” was my advice, “and the V6, if you’re so inclined, is almost as good as the V8.” That’s true, by the way: it would be perfectly possible for a so-called “performance buyer” to enjoy driving the plain-Jane G8. During my evaluation of the V6 model in the curvy canyons south of San Diego, I utterly humiliated a group of hardcore Ducati-mounted sportbikers in such egregious fashion that I received a written reprimand after the event from a GM corporate toad for “dangerous vehicle operation”. A good car, solidly executed. 

I flew home from San Diego full of hope that Pontiac finally had a car for which very few excuses need be made. Yes, the G8 had a few weak spots – flimsy interior pieces, unfortunate color choices, a visual distinction between the “standard” and GT models so miniscule that GM’s own flunkies repeatedly mis-identified the two during the press event – but it also had solid pretensions of automotive greatness. It was worth buying.

Ay, there’s the rub: buying the thing. In the six months that followed, my brother learned firsthand about the misery of dealing with Pontiac dealers. This is the same group of people, remember, who effectively held the first batches of 2004 GTOs hostage, demanding ten-grand markups and no-questions-asked deposits before finally panicking and selling the backlog of unwanted Goats for invoice minus holdback in enormous, humiliating newspaper ads which inadvertently slaughtered the car’s residual value. The attitudes of these domestic dealer ding-dongs, seemingly formed during the brief halcyon days where the Grand Am was GM’s best-selling automobile and served as the exclusive transport option of every stripper, Wal-Mart cashier, and three-hundred-pound, trailer-park-bound, human hippopotamus in the Midwest, could best be described as “aggressively unfriendly”.

My brother’s experience started with an attempt to “pre-order” the car. He was assured time and time again that the cars would be “impossible to get” and that only a sizable deposit would guarantee a spot in line. When the G8 began to pile up in dealer lots despite the predicted shortage, he was repeatedly denied a test drive despite being a respectable-looking thirty-year-old who wore Canali suits and appeared with his wife and young son in tow. After multiple incidents where dealership personnel made it plainly obvious to him that it would be doing him a favor to let him so much as sniff a G8, he gave up and bought another Mazda. I can’t blame him.

Still, hope springs eternal in the human breast, particularly when the human breast involved spent hours watching “Knight Rider” as a child and longingly watching the third-generation Trans Am “GTA” roll thunderously through the neighborhood. With nearly half the G8s ever produced still silently flat-spotting their tires in dealer lots, my brother thought he’d try one more. Again, he visited, called, emailed tirelessly, serenading his office with the sound of the various dealers’ on-hold music via his desk speakerphone, waiting for a low-options G8 GT at a reasonable price. The e-mail which opened this article represents the best offer he’s yet seen.  Mark my words: when the last Pontiac dealership in this country is either razed to the ground or ignominiously remodeled to sell Chinese crapwagons, it won’t take a Heinrich Schliemann to discover the story of why GM’s Excitement brand found itself stripped of its flaming chicken wings and buried in the cold, dead ground.

“The first real casualty of the current recession may well be the middle-priced automobile. For years it not only provided transportation for the middle class but was a firm steppingstone on the stratified pyramid of personal material progress.” That’s from Time magazine, 1958. A different recession, in a different era. But there can be value in gazing back. That’s how we’re supposed to learn, right? To keep from doing the same stupid things over and over? Or maybe you’re more in the Conway Twitty camp. His message from the same year: It’s Only Make Believe.

Reading some of the coverage of the recession 50 years ago is eerie. You’ve got to keep checking the date of the article to make sure you didn’t accidentally pick up (or click on) something from last Tuesday. Car sales fell 31 percent, unemployment in Detroit hit 20 percent. Lots of people said “worst since the Great Depression.” As with our current recession, prices didn’t fall across the board. Wholesale prices actually rose 1.6 percent. The Democrats made huge gains in Washington.

The differences surface as you drill down. No housing bubble; this one started as commodity prices dropped off. Hedge funds didn’t tumble like Sputniks. Credit did not get tighter than Annette Funicello’s sweaters. When it comes to the automotive industry,  the story’s as fresh as ever.  The Time article continues:

“[Sales of mid-range cars] are down 51% from the same period last year, far more than other sections of the industry. Production of Oldsmobile has dropped 44%; Buick, which was once in third place, 40%; De Soto 77%; Mercury 64%; Pontiac 31%; Dodge 70%. Ford’s middle-priced Edsel, brought onto the market last year, is a flop.”

The names have changed, but not to protect the innocent. In the first recession following the post WWII boom, half of America’s middle class ducked a new car purchases. De Soto took it hard. Dodge wouldn’t have made it through if hadn’t been part of Chrysler. The axe hung over Olds for another 40 years.

Economics isn’t the whole story.

In 1958, Detroit suffered a design gap. Tastes switched quickly. Suddenly, Motown wasn’t making what the bulk of American’s wanted. (Sound familiar?) As the economy grew from 1945 to 1955, American cars grew as well. Your basic Chevy lengthened by two feet in ten years. Ford grew four feet.

In terms of scale, amenities and prices, entry-level cars moved up, in many cases surpassing what would once have been considered the near luxury or luxury class. The process left nothing beneath. In 1958’s recession, the choice wasn’t between a small Plymouth or Chevrolet. It was between holding on to your current car or taking the bus. This pattern repeats itself for the next 50 years, tracing every boom/bust cycle until it seems inevitable.

As inevitable as the invasion of foreign cars. While nascent after the War, overseas marques were steadily attracting fans. The foreign car market-– British and German, mostly– rose 110 percent, as the market for Detroit iron fell. The European brands were smaller, more fuel-efficient and, people were learning, still fun to drive. The massive increase percentage-wise meant fewer than a quarter-million cars, but another part of the pattern formed. People sampled Volkswagens and MGs and didn’t go back to Impalas and Imperials.

Albert E. Birt, president of Manhattan’s Hambro Automotive Corp., sold 24k British cars in the US in 1957. In 1958, Birt said “The imported-car market might increase to 300,000, but I can’t believe it will go beyond that.” Detroit believed imports carried the threat of hula hoops.

Nor did Motown believe in America’s sustained desire for small, economical cars. The late 50s were a blip. In terms of labor, design, marketing and advertising, small cars were not going be all that much cheaper than full size cars. So why bother?

In the end, American automakers were half right. The pendulum swung in the early 60s. For another decade it was all about size and power. Funny thing about pendulums, though. They keep swinging. GM, Ford and Chrysler weren’t ready for the tune to change in 1972. They weren’t ready for it now. In every downturn, imports make gains. And hold them.

The 1958 recession ended quickly. The lesson– to hedge, to put your eggs in like three or four baskets– was never learned.

“Since its beginning,” Time reported in ‘58, “the U.S. auto industry has narrowed from more than 2,000 different automobiles to 17 makes turned out by five major companies that produce 96% of all cars sold in the U.S. In the future, many of the overlapping models produced by the big five may also disappear.”

Remember the big five? Yeah, next time around no one will remember the big three either.  Or, as Connie Francis put it, Who’s Sorry Now?

First to blink, first to lose. That’s what GM’s creditors know. As does Ron Gettelfinger, the United Auto Workers (UAW) boss. And that’s why there isn’t enough time between now and February 17th– the congressional deadline for the next federal loan installment for GM– for General Motors to craft a workable deal to save this company. No one is going to blink. So no one will cave, and nothing gets done. Then what?

The loan terms of the bailout specified a raft of requirements that GM has to meet or else Treasury might call its loan and force the General to face a bankruptcy Judge. There are two key terms of GM’s federal loan agreement that will definitely not be met.

First, the unions have to meet wage/benefit parity with the foreign transplant non-unionized work force. That’s a non-starter for the UAW. In fact, two hours after the bailout was announced, Ron Gettelfinger announced his itention to get the new Democratic President and Administration to amend that “unfair term.” Why would the union boss offer GM concessions that he seeks to overturn? He wouldn’t And won’t.

In any case, active UAW members’ direct wage and benefits are already close to parity with the transplant workers’. The important differences involve work rules, job classifications, and a telephone book’s worth of nonsense that makes union workers more unwieldy (read: costly) than transplant workers. The loan terms seek to sweep all of this away.

But UAW members believe they have the right to these job protections– even at the taxpayers’ expense. And if all those hundreds of pages of the union contract disappear, what’s the point in having a union? Legally, the UAW must put any changes to its existing GM contract to a member vote. Which it would lose. Unless, as always, there’s a quid pro quo.

The UAW (and its media supporters) likes to point to its “historic health care giveback”: the agreement placing GM retiree health care obligations into a union-run benefit association (a.k.a. VEBA). That little “concession” cost GM approximately $10b in cash. Of course, GM doesn’t have the cash, and never will– unless the American taxpayer antes up some more Benjamins. Meanwhile, The General already deferred its first payment (with interest accruing).

The Treasury Department inserted terms in the bail out loan agreements requiring the UAW to take stock in the new GM for half of the VEBA cash contribution owed. But it’s harder to skim stock than cash, and lots of stock won’t pay the medical bills coming due for retirees either. So the debt for equity swap is simply not going to happen.

The second key loan agreement term: a two-thirds debt-for-equity swap imposed on GM’s financial creditors. Nope.

If you add up the General’s debt liabilities (auto operating company related), the figure approaches $66b. Subrtact the Government’s bailout loan of $13.4b and the UAW VEBA liability of $10b (two creditors that want cash payment, not stock), and GM still carries $43b of debt.

Then there’s $7b in current debt (debt owed in less than a year), consisting of short term obligations and current portion of long term debt. The chance that short term creditors will take a long term position in General Motors is ludicrous. Especially when Uncle Sam is on the hook, and considering the Treasury Department’s cavalry rescue of GMAC.

That leaves long term debt of $36b comprised of various unsecured bonds of varying maturities, foreign currency denominated debt, bank debt, convertible debt (at strike prices that will never be seen again), and other debt-like items such as capitalized leases and muni bonds. Somehow, GM has to get approximately $25b of this grab bag of debt converted to equity.

Convincing these parties to agree to swap for debt for equity is impossible. There are various priority considerations, the fact that stock of a new GM might just be worthless, and that muni bond holders and lessors have zero interest in stock. Bank lenders with collateral, bond holders with near term due dates, and smart hedge fund owners of GM’s public debt will hold out until the very end.

There’s no chance to arrange any kind of equity exchange on reasonable grounds outside of bankruptcy court. It just ain’t gonna happen without that filing. We know it, the government knows it, and bankruptcy and reorganization experts know it. The only ones who don’t get it is GM itself.

“Inside sources at GM” have spent the last couple of days “suggesting” to the press that The General won’t need any more money beyond the $13.4b bailout from the Treasury (and another $6b for GMAC). GM CEO Rick Wagoner joined his union boss to make the announcement on TV this morning.

Sure, $20b in government money would be enough to buy the survival of GM (and GMAC)– provided U.S. auto sales hit the low end forecast (between 10.5 and 12.0m units) AND the other guys takes the hit. But no one will blink.

And even if GM doesn’t need more money, it’s still a basket case of a company run by the executives who dug the hole. There is only one solution: bankruptcy. Let’s get on with it already.

The entire autoblogosphere is abuzz over the new Buick LaCrosse. And not just in the pre-show preview, “check this out” kind of way. Or even in the sniggering “guess what the name means in Quebec” way. No, full-service pimping of GM’s latest mid-sized sedan is clearly the order of the day. And a single thread runs through all the breathless commentary, namely the alleged youthful, modern appeal of the new LaCrosse. The message is loud and clear: this is not your father’s Buick. Or, as The DetNews‘s Scott Burgess puts it (in hopes of avoiding the painful Olds legacy), “this is not your grandfather’s Buick.” The Freep opens its paean to the LaCrosse by pointing out that it was designed by “twenty- and thirty-somethings.” “No More Blue Hair!” screams the headline at Jalopnik, who also parrot the “not your grandfather’s Buick” line. But, like the infamous “not your father’s Oldsmobile” ads everyone keeps referencing, all this sound and fury merely cements long-standing brand perceptions in the minds of consumers. And hastens the long-overdue death of Buick

GM’s Susan Docherty reveals to Automotive News [sub] that Buick’s youthful reinvention is not being kicked off by LaCrosse. “With the introduction of the Enclave, we have broken through the perception that Buick was just a brand for old people,” says the Pontiac Buick GMC VP. “The Enclave started a transformation of the brand that has only just begun.”

Oh really? So the DetN’s Burgess wasn’t kidding. This really is about repositioning Buick as “your father’s” brand instead of “your grandfather’s.” And with an average buyer age of 63, that may not be a bad goal. But if Enclave buyers were still well into their 50s, how far are these claims of youthful reinvention really going to carry the Buick brand?

Not far. Not only will this LaCrosse fail to appreciably bring down the average Buick customer age (for reasons explored later), the entire marketing effort sends the clear message that its core buyers are an embarrassment to the brand.

As does the car itself, which is loaded with techno-gizmos and has optional all-wheel drive. Why? To tempt the youthful hordes from their “near-luxury” Toyota Avalons, Acuras TLs and the like. And further convince their core market that Buick’s are no longer senior-friendly havens of low-tech in a world gone mad.

Compared to the last few decades of Buicks, the design is understated and elegant. But that’s like bragging about attracting 50-year-old customers instead of 60-year-olds. From some angles the new car looks suitably Lexus-like, echoing the current LS at the rear and first-generation GS from the side. From the front its splashy waterfall grille is subtle in comparison only to Mercury’s chrome-bauble bling.

From the vantage point of online press pictures, the interior does look undeniably decent. Unfortunately, it also does away with the sense of spaciousness and simplicity that defined Buick’s appeal even when its styling and performance was at its worst.

Even if the new LaCrosse is the best Buick made in years (and it probably is), it does nothing to rescue the brand. The relentless emphasis on customer age in marketing and media coverage shows deep insecurity on GM’s part about Buick’s appeal.

Buick is one of the most traditional symbols of middle class achievement, an image that over the last few decades has appealed to fewer, older customers. That image has been successful in China, where a young emerging middle class hold many of the values that once made Buick a success here.

As a well-qualified youngster in the car-buying demographic I feel confident in arguing that America’s aspiring 20 and 30-somethings are generally striving for individuality and expression, not suburban comfort, conformity and subtlety.

As a brand as steeped in tradition, Buick needs to reinvent itself in a way that builds on its past and broadens its appeal without alienating long-term fans. Something along the lines of Canadian Club’s “damn right your dad drank it,” campaign.  When brands outlive their historical moment, only some sense of irony or humor can keep their core values relevant. If trying to keep Buick relevant even makes any sense at this point. Which it probably doesn’t.

GM has had a hard enough time updating Cadillac’s staid image in a way that doesn’t completely alienate traditionalists. Attempting this balance with Buick does little besides create the brand engineering and cannibalism that destroyed both brands in the first place.

Me? I actually want one of my father’s favorite Buicks, the 1963 Riviera. Which was actually marketed to people like his father. In terms of recapturing the immediate yet timeless appeal of Buick’s heyday models, the new LaCrosse comes up well short.

A recent NY Times op ed gave plaudits to a Senate investigation held in the 1930’s to discover the causes of the Great Depression. But the power of congressional investigators is vastly overstated and overrated. They can be stymied by resourceful, deep-pocketed corporations. Considering the current attitudes of US automakers, it’s unrealistic to expect any voluntary disclosure to Congress, any meaningful disclosure to taxpayers. But, as the Bermie Maddoff liquidation shows, bankruptcy court is another matter entirely. The trustee in the Madoff liquidation/investigation can ask the bankruptcy court to authorize subpoenas, which can be used to compel production of documents and to compel witnesses to testify. The prospect literally scares GM and Chrysler witless.

Both GM and Chrysler have much to hide. Have hidden much. GM has a long and ignoble history of overstating and restating its accounts, by billions of dollars. In 2006, GM revised profit figures for six years previous, and restated reported earnings for 2005. There are also no less than three ongoing SEC investigations into its dealings. All secret.

The company’s CEO and Chairman (former Chief Financial Officer) Rick Wagoner has been moving money around for a long time– selling assets, arranging deferred payments to the union, negotiating with creditors of their bankrupt former subsidiary Delphi, creating financial instruments with the automaker’s financial arm (GMAC), transferring cash from GM’s international subsidies and much, much more. Despite the fact that the U.S. government is now on the hook for $17.4b in loans, we, the taxpayer, have not seen GM’s books.    

Cerberus, Chrysler’s private equity owner, and [still] the holder of a 49 percent share in the recently federally cash-infused GMAC ($6b), is also shrouded in secrecy. The Wall Street Journal recently unearthed the fact that Cerberus mortgaged Chrysler’s Auburn Hills HQ under its own name when it purchased Chrysler from Daimler. What else don’t we know? We don’t know how much rent Cerberus is charging Chrysler. We don’t know how much of Chrysler’s other assets Cerberus mortgaged to pay back private investors and/or raise capital. We don’t know what arrangements Cerberus made with GM re: GMAC.  

When GM and Chrysler went to Congress to plead their case for federal loans, politicians demanded a look at the books. Both automakers withheld “commercially sensitive” information. In other words, they received their money without full disclosure. When discussing their situation in front of the cameras, both automakers used terms that sounded like accounting terms– with no accepted meaning in accounting parlance. At the same time, GM and Chrysler deployed public relations groups to plant incomplete and misleading news articles, issue biased press releases, and draft op ed pieces that fooled main street media and confused any real disclosure. 

A Chapter 11 filing is a process of legal discovery. In a Chapter 11 case, the court forms an official committee/committees of creditors. Any official committee can ask the bankruptcy court to issue subpoenas relating to the company’s acts, conduct, property, liabilities and financial condition.

The subpoenas can compel company officers– and others– to produce documents. They can also force witnesses to testify under oath. Committees can use their investigative powers to try to find assets to pay creditors. For example, if the bankruptcy court could establish the exact financial relationship between GM NA and its foreign subsidiaries. By the same token, if GM made preferential payments to some creditors, the committee could reveal this fact. 

Committees also investigate transactions between a debtor company and its officers, directors and shareholders, seeking to determine if any improper transfers were made. If Cerberus leveraged Chrysler cash or assets to benefit Cerberus’ investors/shareholders and/or assumed debt that left Chrysler without sufficient operating capital, these facts will come out. 

While the public has a right to know where it’s money went, there are limits to what a bankruptcy investigation can expose. A creditors committee’s findings won’t become a public document. Investigatory depositions of company officers and directors are not open to the public. The committee is interested in getting the highest possible recovery for the group it represents, not a general disclosure of what went wrong and why.

That said, if criminal or illegal activities are exposed, the bankruptcy judge would refer the case to a criminal prosecutor. And leaks to the press are not uncommon. All of which means if GM or Chrysler were to file for C11, both companies would face intense scrutiny of their business dealings. 

Meanwhile, the absence of information about the current financial condition of GM or Chrysler and the detailed terms of  Treasury loans to automakers is deeply troublesome. Our new president has stated his commitment to a “higher standard of accountability and transparency.” It remains to be seen if he will do anything to require adequate disclosure by recipients of federal loans, or whether it will be business as usual. 

Either way, if and when federal bankruptcy court get involved with Chrysler, GM and/or Ford, it’s hardly likely that their management teams would emerge unscathed. In a battle between fear and greed, fear wins.

When I went car shopping in the early ‘90s, my priorities were fun-to-drive, reliability, and economy. Style— not so much, or so I thought. But the first time I saw a Saturn, I knew instantly what it was, although I’d never seen a photo, since the car was conspicuously absent from the ads. As soon as Consumer Reports gave Saturn a preliminary blessing for reliability, I gave it my consideration. Ultimately, I became so smitten that I didn’t bother to re-look at the Integra after I discovered to my great chagrin, in the dealer’s lot, that the turning circle was nearly as big as the namesake planet’s diameter.

Nonetheless, my Saturn, a ’93 SL2 5-speed, was a hoot to drive. Once a honking Nissan SUV tried to pace me on Cape Cod’s exceptionally scenic and winding Old County Road. He could catch me on the straights, but I lost him easily in the twisties. The Saturn steered precisely and cornered flat with virtually no understeer, aided by its low mass, less than 2500 lbs. Like the vorpal sword in Jabberwocky, the switchgear went snickersnack. The gas mileage: 35 on the road. Although a google search failed to find the quote, some reviewer, somewhere, I swear, had dubbed Saturn “the practical person’s sporty car.”

Yet, within a few years, when people asked me what I drove, I found myself apologizing for the bland… uh, brand. The first time I saw generation-2, I didn’t know whether I was looking at a Hyundai, a Tercel or an Olds. In the same way that peoples’ faces lose definition as the high cheekbones and clear jaw lines of youth disappear under the sagging skin of old age, so the Saturn’s appearance lost its sporty edge.

So did the driving dynamics. On my first drive, on a moderately hard turn which my Saturn would have taken with aplomb, the car leaned way over, and the rear let go.

What happened? My theory was that after the quasi-independent Saturn Corp. was yanked back into the Mother Company in 1994, there had been a turf war between Saturn on Pontiac over which would be the “sporty” division, a status Pontiac had claimed since the first GTO. The evidence: the ‘96 Pontiac Sunfire looked exactly like they’d taken the first gen Saturn, and tweaked the lights.

Dick Danjin, who did two stints as UAW rep in charge at Spring Hill, tells me the problem was far more general (no pun intended). In the vision of GM president Roger Smith, Saturn was to take over where NUMMI left off, teaching old, sclerotic GM all the new Japanese tricks. Collaboration rather than conflict would characterize labor-management relations. This meant, among other things, that the cars would come off of the line properly assembled (a.k.a. “first time quality”) instead of post-assembly fixes, as was the norm on Big 3 assembly lines.

According to “Comeback: The Fall & Rise of the American Automobile Industry,” GM’s $3.5b Saturn investment made it the object of jealousy among the other divisions. Indeed, the autocratic Smith had practically forced Saturn down GM’s intake manifold. With Smith’s departure in 1990, soon after launch, Saturn lost its patron.

But even during pre-launch, Smith couldn’t keep the bean counters from nickel and diming Saturn. Even after suppliers had been vetted and given contracts, accounting would enlist new ones in their quest to shave pennies per car, and quality would suffer, says Danjin.

Saturn was launched before it was ready, says Danjin, who adds that he and his original corporate counterpart, Jay Wetzel, the vice president of engineering at Saturn, had protested vainly. Brake discs warped easily, and there was an oil use problem.

Soon after his second Saturn stint began in 1994, Danjin found that first time quality was a pathetic 38.7 percent, and 300 people were working in the post-assembly fix-it shop 20/7. The quest to achieve black ink through high production was forcing levels of overtime that corroded quality. Danjin says his letters to Saturn corporate Kahuna Skip LeFauve, with carbons to his UAW boss Steve Yokich and GM president Jack Smith (no relation to Roger) barely boosted first time quality to a lackluster 51 percent.

Bottom line: its status as corporate stepchild prevented Saturn from receiving sufficient financing to successfully launch a new car company. Once Saturn lost its quasi-independent status, it lost its way. The original Saturn sold a record 286k units in 1994, placing fifth in car sales that year. Twelve years later, five Saturn models, the Aura, Ion, and Sky automobiles, and the Outlook and Vue SUVs sold a combined total of just 240k units.

Hacks blamed the genesis of Saturn’s slide on letting the original style go stale, and lack of other models. But nearly 20 years on, the gen-1 styling still looks fresh. Had Saturn remained true to Roger Smith’s vision: an import fighter with steadily improving quality, technology, and driving dynamics, and had they kept the original’s great looks, I’d still be on Planet Six.

There are all sorts of end of the year automotive lists. The ten best this and the ten worst that. My favorite list is not a car gong per se. The Darwin Awards are given to those who improve the gene pool by removing themselves from it. As you might imagine, automobiles figure prominently in this roll call of death by stupidity. To wit: Ivece Plattner of Italy. Plattner was driving a Porsche Cayenne (which is already a bit of a red flag), stuck in traffic on a railroad crossing, waiting for the light to turn green. When the crossing barriers came down, they trapped the Cayenne.

Onlookers said he didn’t realize he was stuck until the train was approaching. In desperation he opened the door and jumped out of the car. Instead of getting out of Dodge, Plattner started running up the tracks, in the train’s path, waving his arms and screaming. The engineer hit the brakes, but inertia and momentum working the way they do, the train hit the Porschephile and threw him about 100 ft. Plattner was survived by his Porsche Cayenne, which he loved more than life itself.

In a story from the Talmud (tractate Shabbat 31a), a potential convert approached the great rabbi Hillel and asked him to sum up the Torah “on one foot.” Hillel replied “what’s distasteful to you don’t do to your neighbor, that’s the entire Torah, the rest is commentary, go and learn.” Too bad a couple of ranch hands on a lonely country road hadn’t learned that lesson…

The telephone company had been burying lines. To allow traffic to pass, they dug up half the road at a time and put up warning barriers with flashing lights to direct traffic to the safe side. After they laid the cable half way, they’d fill in that side and then do the same on the other side. Pranksters had moved the flashing lights to the good side of the road.

Speeding late at night and way over the legal blood alcohol limit, the ranch hands drove straight into the hole and died. Because of the moved lights the Sheriff’s accident analysis turned into a criminal matter. Crime scene analysis of tire tracks and footprints on the dirt road revealed that the pranksters were the ranch hands themselves, on their way to the bar. 

I don’t think that rabbi Hillel would have put it this way, but payback’s a bitch. The next automotive Darwin award also involves a pickup truck, this time pressed into service as a winch.

It seems that someone had cut down a fairly large tree at the base of an embankment. For some reason, instead of just tying a cable to the tree and his hitch and pulling the tree up the slope he decided to use his rear axle as a winch. He jacked up the truck and replaced one tire with a bare rim he had in the bed hoping to wind the cable on the rim as it spun. He went over to the cab and had one foot on the gas and another on the ground, with the door open, so he could observe his handy work. He put it into gear, hit the gas and the truck lurched back, swinging the door on him and trapping him as the truck went down the embankment.

[From an automotive standpoint, this Darwin may be the most interesting. The Darwin Awards are based on submissions and votes at their web site and there’s a forum where people can discuss the different stories. This one generated a long and interesting thread on differentials, friction and torque.]

The final automotive Darwin Award for 2008 involves a dangerous combination: young males with a SUV, a shopping cart and a passionate desire to do something they saw on an internet video.

Cameron Bieberle, an 18-year-old Winter Park, Florida man decided to take a ride in a shopping cart, hanging on to his friend’s SUV as it drove through their apartment complex parking lot. While speed bumps are but a nuisance to a SUV, shopping cart suspensions have a bit less wheel travel. Bieberle was bounced from the cart and landed on the pavement headfirst. DOA.

With car sales so deep in the toilet that Toyota and Honda are both losing money, while the domestics live hand-to-mouth on government subsidy, it’s nice to know that there are still worse ways to mess up with cars than running a car company. As they used to say on Hill Street Blues, be careful out there. Or, the gene pool you save may be your own.

 Maranello, we have a problem. Ferrari sales are down – way down – and waiting lists are evaporating. It’s not difficult to lay the blame for the sales meltdown on the “global credit crisis.” But the Scuderia must shoulder a good portion of the blame. Demand for the F430, particularly the Spider, has virtually disappeared following the arrival of the Ferrari California retractable hardtop. As it turns out, most F430 buyers didn’t care so much about the F430’s mid-engined balance, peerless on-track performance or Schumacher-tested suspension. They were buying the F430 because it was the cheapest Ferrari. And now that there is a cheaper one, they’re buying that instead. What we have here, as Strother Martin might say, is failure to understand the customer. 

Behind the public façade of three-martini lunches and the endless drone of blabbermouthing focus-group research, automotive-industry marketing is a tough job. The marketing man (or woman) is caught between the Scylla of fickle customer demand and a Charybdis of stubborn engineers, stingy accountants and mercurial management. His product is rarely the best one available. He must increase sales by reaching out to new buyers without infuriating current customers.

Our intrepid marketroid may surmount all of these obstacles, triumph over the previous generation’s reliability record, obscure the unfortunate styling of the wagon variant, and convince the press to report favorably on cupholder count while neglecting to mention the fifty-dollar Korean original-equipment tires, only to see his baby stumble over the final, most critical hurdle: the omnipresent gap between perception and reality.

This is the black magic of the marketing biz, what Orwell called “doublethink,” the Nurburgring of metal-moving. Every brand, every model, every trim level is sold to two buyers: the imaginary buyer and the real one.

The impossibly beautiful and perfect forty-year-old woman who fairly bubbles out of her Christmas-morning negligee upon spotting a red-ribboned new Lexus SUV in her driveway; the square-jawed, Vacheron-Constantin-wearing man’s man who attentively pilots his Nine Eleven down a rainy autobahn; the quartet of twenty-something models without which no Jeep Wrangler would be complete-– imaginary buyers, all of them.

Next to them we find the ephemeral best selves presented on the Internet: the fellow who claims to dominate twenty trackdays a year in his Elise but in reality holds up the hind end of just a few Novice sessions; the people who have ten cars in their “sig” but neglect to mention that nine of them are in the actual possession of distant relatives; the woman who faithfully buys the same car her neighbors do while claiming safety, reliability, or economy as the reasons. 

Real buyers are far less interesting. They’re primarily concerned with the cheap shine of perceived prestige, the dimly understood terror of major mechanical difficulty, and the hard graft of discounted pricing.

Many marketers make the classical mistake of falling in love with their own creations. Who would have thought that a relatively unlovely, pudgy-hipped hardtop convertible would displace the disco volante F430 Spider? Only somebody who understands real Ferrari owners. 

It’s a mistake made by manufacturers far less romantically inclined than the Scuderia. Stung by criticism of the tepid first-generation “Quaalude,” Honda slaved to make each successive Prelude faster, more involving and more perfectly attuned to the sensibilities of its enthusiasts– only to see the model’s sales slaughtered by the Accord Coupe. The imaginary Prelude buyer was a corner-carver; the real Prelude buyer wanted a two-door Honda with a trunk.

Cadillac, as a brand, is almost indelibly associated with the V-8 engine. But once the 3.6 direct-injection mill arrived in the STS, the Northstar version of the same car became showroom poison. Real Caddy buyers are more than happy to cut the cylinder count and save a buck.

Ford’s marketing corps had distinct customers in mind for the Edge, Flex, and Taurus X; in reality, eighty percent of the buyers for any of the three are also serious buyers for the others. 

Every time Toyota allows the Camry to grow bigger, heavier, cheaper, and floatier, they stray further from the tidy perfectionism of the landmark 1992 model – and the car finds its way into more garages as a result. 

As the American automotive market goes from bad to worse in 2009, expect more and more manufacturers to demand additional pragmatism from their marketing departments. 

From the enthusiast perspective, automakers may soon trim big engines, manual transmissions and thirty-two-millimeter swaybars from new-model programs. Since most people can be bullied into buying a silvery-greyish car with a grayish-black partial-leather interior, automakers’ current (and despicable) lack of real color and interior-material choices will become even more restrictive.

Voltaire warned us that “the best is the enemy of the good.” The reverse is also true. The poseur Ferrari California is the enemy of the poised F430; the clumsy Scion tC was the death of the sublime Celica GT-S; the everyday Accord Coupe drove a stake into the exquisite Prelude’s heart. 

Or perhaps that’s wrong. The American car buyer finds himself in the position of Fight Club’s narrator at the movie’s end. We “see” the pistol held to our head by the manufacturers, the dealers, the marketers. But they aren’t really holding the gun. We are. If you want the automakers to keep building the kind of cars you really want, buy one.  

Oregon governor Ted Kulongoski’s recently released transportation plan brags of creating jobs to build roads and bridges. But its main focus: making sure those roads won’t be used. The plan talks about “congestion,” “bottlenecks,” “greenhouse gas,” “carbon,” “green standards,” “non highway programs” and “incentive programs designed to reduce the number of cars on our roads.” To realize this vision, Kulongski and his supporters have to reinvent the wheel, or, more precisely, the tax on those wheels.

People are driving less and using more fuel efficient vehicles. It’s only a matter of time before alternative propulsion vehicles like hybrids and EVs account for a significant chunk of Oregon’s registered automobiles. You’d think Kulongoski and the state’s environmentally-minded politicians would be happy. Ecstatic. But the Beaver State’s fuel taxes states pay for its transportation funding. The less diesel and gasoline drivers buy, the less tax revenue for the state.

So how do you get people to drive less AND pay more for the privilege? Tax them by the mile. That way, the state can monitor and manipulate the per mile rate to generate sufficient tax revenue to cover their green dreams– no matter how efficient the taxpayers’ personal transportation.

Last year the Oregon Department of Transportation announced a successful demonstration of a GPS-based system. It tracks individual car’s movements, measures their mileage, calculates a fee and generally enables bureaucrats to collect “mileage taxes.” Now Gov. Kulongoski wants implement that system.

“The Governor proposes continuing the work of the Road User Fee Task Force – which will begin to partner with auto manufacturers to refine technology that would enable Oregonians to pay for the transportation system based on how many miles they drive.”

The idea is hardly new; pay-as-you-go has been the darling child of the greenhouse gas gang for some time.  Several European countries use tracking software to tax commercial trucking. London’s congestion charge is another form of the system. And despite public opposition, the UK government seems hell bent on “road pricing.”

Nor is Oregon’s desire to monitor motorists unique within the United States. To wit: the California Air Resources Board’s OBD-II (On-Board Diagnostics) regulations for carmakers.

The California standards mandate that OBD-II computers diagnose and record problems with cars’ emissions systems. Technicians download the data at inspection time. To more efficiently test cars and identify the vehicles that are polluting, California has upped its game. OBD-III specs seek to link on-board emissions diagnostic data with telemetry. Cars remotely identified as polluters would be flagged for testing.

The original idea was to have road-based sensors, so that drivers could be notified to bring their cars in for testing and repair. Of course, satellite based technology is more practical now.

When OBD-III was first announced, the implications for privacy and possible Fourth Amendment violations were obvious. With the threat of global warming enjoying mainstream acceptance, there’s little chance that these fears will prevail over arguments claiming the primacy of “the greater good.” After all, it’s “for the children.” And the future of our planet.

But even cloaked in a mantle of green advocacy, there’s no question that OBD-III, like road pricing, is the slippery slope to a world where all motorists’ movements are monitored, recorded and analyzed.

Obviously, we can’t stuff the technological genie back in the bottle. Police departments routinely use cell phones to track suspects, greatly increasing law enforcement’s effectiveness and providing invaluable assistance during abductions. But there are legal requirements for that procedure; laws that protect cell phone owners from indiscriminate/random search and seizure.

It’s also true that “black box” on-board electronics now record your speed, g-forces, acceleration, air bag deployment and more. In some states, the police can seize that information pursuant to a criminal investigation, with or without your permission. But again, it’s post-facto. The police have determined that a crime may have been committed.

In contrast, California wants all cars to tell them if they’re polluting, at any time they choose; without prior notice, a court order or a presumption of innocence. Oregon wants all cars to report to the treasury department. Where will it stop?

Perhaps along with your tax bill, Gov. Kulongoski  will send you an invoice for traffic violations, such as speeding or improper tire inflation. Since red light cameras can issue violations without a complaining officer, this seems like the next logical step.

The English, who are now the most surveilled nation on planet earth, have been justifying the proliferation of license plate, facial recognition and street cameras with “if you’re not doing anything wrong you have nothing to worry about” for decades. Meanwhile, America was founded on the principle that the government poses the greatest threat to personal liberty. Which is true, if technologically irrelevant.

Oh, and Gov. Kulongoski also wants to raise the state’s gas tax by two cents a gallon.

One of the uncomfortable facts about the automobile industry: its pay rates have been exceptionally high almost from day one. That said, just how much of a factor worker wages (and the cost differences that go with them) have to do with Motown’s meltdown is debatable. One thing’s for sure: the United Auto Workers (UAW) refusal to re-negotiate their current contract– repeated within two hours of the President’s cramdown conditional bailout bonanza– puts it squarely in the firing line for both sides of the “debate.” When trying to understand their seemingly suicidal recalcitrance, history is our guide.

For all of its famous affect on “creating America’s middle class,” it’s important to remember that Henry Ford’s “five-dollar day” (actually a bonus program) was a solution to an intractable problem. Put simply, Crazy Henry had to hire 40k men a year to have 10k working.

There are two things that haven’t changed about auto assembly since those early days: assembly-line work is a grind (imagine doing the same thing, 500 times a day) and auto production requires a steady work force. The initial raise in pay was to give the worker a stake in sticking with a nasty job. Yes, the worker could be replaced. But replacing him slowed the whole process down.

While there have been epic debates, and not a little violence, over unionized automotive workers’ wages and conditions, they generally conform to a worldwide pattern. The type of union– “company” (tame), “trade” (often bribed into submission) or “Industry”– doesn’t have much effect on the outcome. Recent surveys revealed developed world hourly wages for assemblers as more-or-less equal. It’s the “other” stuff– health care and pensions– that makes the biggest difference.

In theory, the USA’s lower corporate taxes should compensate for the advantages enjoyed by automakers operating in countries where employees get their health care and pensions from their government. In practice, Detroit’s sunk by simple math. While The Big 3 have been reducing their total workers. their pool of retired ones has been growing. Ford, GM and Chrysler have more retirees than active workers. Which accounts for much of the “$75 an hour” numbers you hear quoted in the MSM.

Worse, The Big 3 have funded all these benefits on a pay-as-you go basis. Instead of setting aside funds to cover pension and health-care throughout a worker’s career, like a company-level 401K, Ford, Chrysler and GM have been paying their retirees out of current revenues.

This is the same “trick” the U.S. government uses for Social Security. But at least the tax base is growing (and not aging much). The Big Three have shrank and aged themselves into a huge problem.

In theory, the Mother of All Health Care pay-it-forward UAW VEBA fund should finally allow the 3 to put these “legacy” costs behind them (in another two years). Only they still have to fund the fund. Putting company stock in the fund in lieu of cash is going to be about as welcome a blanket smeared in smallpox.

Pay and pension issues can always be laid at the feet of the money-men, who never looked past the next quarter. Health care and pensions can be “finessed.” But union work rules are, apparently, forever. This could be Detroit’s Gordian knot.

Put simply, you can’t. The UAW work in accordance with a series of massive documents directly exactly what every employee is allowed to do, how they should do it and how it’s judged. Having to adhere to a book of rules that practically require a forklift (and designated “operator”) to carry makes anything resembling “management” a major undertaking.

But before we lay the blame completely at the UAW’s feet, let’s consider how management performed when the Union Slacker’s Guide to Life, the Universe and Everything didn’t apply. The California NUMI plant (Toyota Matrix/Pontiac Vibe) doesn’t count. Toyota runs the show there. Saturn is the exception that proves (i.e. tests) the rules.

For GM’s different kind of car company, The General hand-picked workers willing to dump the rules, and then had them build one vehicle for almost a decade. Later on, GM set up the Aztek/Rendezvous plant in Mexico (lower cost AND no restrictions). Bottom line: both ventures failed to sell enough vehicles to make their plants pay. As restrictive as the work-rules are, they seem to conform to standard Big Three thinking as much as management thinking conforms to them.

Perhaps the UAW’s greatest sin, then, is the fact that they’ve been “along for the ride.” More specifically, a seemingly endless supply of money has narcotized the union into suicidal apathy. Worse still, their public persona projects a sense of entitlement that’s toxic to all but their closest political allies.

The UAW’s protests that “we’ve done nothing wrong” is true as far as it goes. But not doing wrong is not the same as doing right. As we shall see.

Imagine your sell someone a house. It’s hard to imagine, I know, but humor me. You settle on a million. You sign. Papers are shuffled, titles researched. Three months later, at the closing, you get  a check for $780K. Imagine there’s nothing you can do. Your lawyers are shrugging their shoulders. $220K poof, gone. The same happens every day in international trade. Welcome to the strange world of world currencies. You sell something in Euro, Yen, Won or Rupees. You ask: “How much is that in real money?” And a few days later, it’s all changed. Such is the life of a global automaker.

Japanese automakers are increasingly anxious about the high value of their Yen. Sure, their holidays and green fees in Hawaii will get cheaper. But when the yen is high their profits from abroad evaporate.

For eons, one Yankee dollar was worth more than 100 Japanese yen. In August, the dollar cost 110 yen. A week ago, it was down to 87 yen. The change spills yet more red ink onto Japanese automakers’ ink-saturated books. Against the Euro, the picture is bleaker still. But the Japanese don’t have as much exposure to the Euro as to the greenback.

Toyota is especially jumpy: “High up among Toyota’s problems is the recent surge in the yen against the dollar and euro. Every ¥1 gain against the dollar results in about a ¥40b plunge in profits at Toyota. While the company made its initial forecast based on an exchange rate of ¥100 to the dollar, the US currency appears trapped around the ¥90 level, a 13-year low,” writes the Manchester Guardian.

If you don’t like thinking in yen, here’s the translation [via Business Week]. “For every one yen strengthening against the dollar, Toyota’s operating earnings are reduced by over $450m.” According to CNNMoney, “Toyota expects losses of about $2.2b due to currency exchange rates alone.” Meaning: If the darned yen wouldn’t have surged suddenly, Toyota would still make a small profit, instead expected losses for fiscal ’08 between $1.5b to $1.7b.

Yoichi Hojo, COO for business management operations of Honda, told the Nikkei [sub] “If the exchange rate remains firmly below 90 yen to the dollar, and depending on the number of vehicles we export from Japan, then there is a possibility our consolidated operating profit for fiscal 2008 will be less than the projected 180 billion yen.”

Hojo’s comments also highlight the fact that the exchange rate is a major driver in whether they’ll build cars at home or abroad. “If the exchange rate remains below 90 yen to the dollar, it would be advantageous for us to increase overseas production, and we would be forced to cope with the issue of reducing the labor force at our domestic plants. On the other hand, if the yen significantly weakens, we would have to increase domestic production and reduce costs at our overseas production bases.”

Locating, building and ramping-up of a new car plant takes many years. Who dares to predict where the dollar, euro, yen will be three years from now? If anybody would have predicted in July that the yen, the currency of that non-growth, zero-interest country Japan would appreciate against the Euro by 33 percent within three months, that person would have been committed. Only to be released four months later and bestowed with the Nobel Prize in Economics.

“So yes,” says CNN Money, “the news is history-making and head-turning from Toyota. But it also paints a gloomy picture of how deep Japan’s recession will be and how tough it will be to recover.” Again, the bulk of the loss doesn’t come from Toyota’s weakness, or the weakness of the market, but the strength of the Japanese currency.

All is not lost for ToMoCo’s honchos. The yen rose from 100 to the dollar (at which it is in the books of most Japanese auto companies) to 87 to the dollar in just six weeks, The Japanese fiscal year usually ends in March. With a little luck or some adroit central bank intervention, the dollar may be worth 100 yen again in March, and Toyota would be profitable.

Japanese officials all the way up to Finance Minister Shoichi Nakagawa have dropped hints that an intervention is possible. Nakagawa told reporters in Tokyo ten days ago that he has “the means” to limit the yen’s strength and is “keenly watching” developments in foreign-exchange and other financial markets, as well as the economy. Since then, the rhetoric’s got louder. But there’s been no intervention yet.

According to Bloomberg, the last time Japan intervened on its own, it sold a record 20.4 trillion yen in 2003 and 14.8 trillion yen in the first quarter of 2004, when the yen strengthened to 103.42 per dollar.

“I am surprised the Japanese haven’t intervened,” said Dennis Gartman, economist and editor of the Gartman Letter in Suffolk, Virginia. “Intervention to weaken your currency can be very effective.” Especially between the holidays, when the markets are thin. Or in March, when it’s desperately needed.

A recent TV ad extols the wonders of the Cadillac CTS. Suddenly, the image zooms backwards and flips around to become a sparkling GM logo. “The CTS is made by General Motors,” the narrator intones. “Surprised?” I sure was. I mean, I understand the intended subtext: See? We’re not a total basket case. But as my father would say, if you’re so smart how come you’re not rich? Students of this series know that GM has plenty of answers to that question. The only thing neophytes should clock: none of these answers involve the phrase “we fucked up.” That and the fact that GM wants you to believe that their turnaround depends on building more cars like the Cadillac CTS. Uh-oh.

Don’t get me wrong. I like the CTS. It’s not a Bimmer beater or a Merc mauler or a Lexus liquidator. But it’s a fine car in its own right, especially at a discount. (Yes, there is that.) Just as the Chevrolet Silverado offers tremendous value-for-money, especially at a discount. (Yes, there is that). By the same token, the Chevrolet Malibu. And therein the problem: it is a token.

The vast majority of GM products– and there are over 120 of them– are, well… let’s not go there. There’s only so much J.D. Power Initial Quality Survey data a man can drink-in before it all starts to taste like Kool-Aid. So, back to my main point…

What’s with the blending of Cadillac and GM? Does anyone care that GM owns Cadillac? OK, given that taxayers will soon have a $13.4b financial interest in The General’s product portfolio, they might appreciate the heads-up. But GM’s paternal relationship with Caddy cuts both ways. On the upside, the CTS is GM’s automotive poster child. On the downside, the GM – Caddy hook-up rivals Jerry Lee Lewis’ first marriage to his cousin as “one those things with which marketing-minded folk shouldn’t bother the buying public.”

The CTS ad’s muddied message is symbolic and symptomatic of GM’s ongoing, endemic and abject inability to manage the core of its business. Cadillac is a far stronger brand than GM, which now stands for executive greed and incompetence, union intransigence, environmental foot-dragging, failed manufacturing, back-room politics and corporate socialism.

Cadillac is such a strong brand– still– that all it really needs is world-class products. Even if you put the CTS in that category, that leaves nothing much worth talking about, never mind buying.

GM is supposedly addressing this deficiency with the new SRX. The view from here: the SRX will be the CTS of luxury utes. It will offer plus-sized comfort priced higher than smaller, less expensive foreign competitors, for less than the cost of its larger, more expensive foreign competitors. How great is that?

Not as great as a no-compromise f-off sedan with presence, power and panache. That’s the popular conception of a Cadillac, as witnessed by the success of the blinged-out, gas-guzzling Escalade (to each their own in the panache department). In fact, all GM had to do with Caddy was build the world’s best automotive products and charge customers exorbitant amounts of money for the privilege of owning them.

Of course, GM can’t do that now. Now that the American automaker’s mortgaged its future to the suckle on the taxpayer teat, Cadillac is hemmed-in by GM’s need to satisfy its new owners: the democratic party. These days, Caddy’s alphanumeric model names might as well start with the letters PC.

This folks, is GM’s strongest brand. Saturn’s branding is in such a shambles that GM’s own TV commercial shows a customer who thinks he’s in the wrong showroom. Buick is dead. HUMMER and Saab are… never mind, GM’s selling/starving them. GMC? Pontiac? Chevrolet? When it comes to branding, GM ain’t got game.

Never mind a “viable business.” Can an American car company survive without viable brands? Not in this market.

I don’t mean a market suffering from seemingly terminal consumer constipation. I’m talking about an automotive arena filled to the rafters with a wide range of highly-focused automotive brands. From Toyota’s reliability rep to the MINI’s fun factor, from unattainable Ferraris to stack ’em high and sell ’em cheap Hyundais, there’s no niche left behind. Without a single compelling brand, GM is nothing more than taxpayer-funded chum in a shark-infested ocean.

So what’s Cadillac’s killer app? The CTS. And what’s CTS’ killer app? Cadillac. That’s the kind of self-referential logic with which it’s impossible to argue and, it seems, impossible to eliminate. But GM’s fortunes depend on better branding. Until and unless GM masters the art of creating and sustaining a tightly-focused automotive brand or eight, they are simpliy killing time. Even as they are slowly, gradually, inexorably killing the only truly valuable assets they’ve ever owned.

My parents had many ways to traumatize me during my childhood holidays. Perhaps the most effective: taking me downtown to donate a hundred bucks to the local Ronald McDonald House. Don’t get me wrong; the charity could well be the best (only?) reason to eat a Filet-O-Fish. But a hundred bucks? That kind of money could have bought two copies of “Star Raiders” for the Atari 800. As it turns out, I’m not the only spoiled brat to resent a bit of charity, as the following Christmas list proves. It’s straight from my top-secret sources at the North Pole: a complete recap of what the more fortunate manufacturers are asking Santa for this year. We’ll start with Toyota.

“Dear Santa, we want a sack of Tundra tailgates that don’t bend when Americans sit on ‘em. We would also like some more of the green fairy dust that keeps the mainstream media from focusing on our ten gas-guzzling truck and SUV nameplates, while continuing to praise us for knocking out a couple hundred thousand hybrids every year.”

Maserati. “Dear Santa, you don’t have to bring us anything. Just take our remaining stock of 2008 Quattroportes and give them to someone deserving. Someone really wealthy, who can afford the service. What’s Mrs. Claus driving these days?”

Mercedes-Benz: “Herr Claus, please would you use one of those Men-In-Black neuralizers (a.k.a. flashy things) when you’re over our North American market. Get everyone to forget this ‘living within your means’ rubbish. Oh, and can you please remove memories of the first-generation ML320? Bitte.”

Mitsubishi: “Santa, we’d like a lump of coal. And a list of every Evo that’s ever run an autocross, so we can cancel all the warranties at once.”

Nissan: “Dear Santa, we’d like all the money back that we spent on that ‘From the Same Mindset’ ad campaign. It turns out that Murano customers don’t care about the GT-R’s fender vents after all. In exchange, we’ll look after something small and feeble that needs a new home. How about Chrysler?”

Porsche: “Dear Santa, we’ve been a bit naughty recently around the hedges (you know what we mean). But if we’re still on your list, we’d like the serenity to accept our massive profits, the strength to continue making grenade-like water-cooled engines, and the wisdom to convince our customers that the 911 is really worth half again as much as a Cayman.”

Subaru: “Dear Santa, we’ve just discovered that one of your elves is the guy who styled every Impreza since the year 2001. Please deliver him to us for a nice warm Christmas dinner. We’ll take care of the rest.”

Honda: “Dear Santa, we need  100k more transmissions for the Acura TL and CL, more mechanics to supplant the single full-time guy most Acura dealers have changing them out fifty hours a week. Also, some more alphabet soup to help us name our new vehicles.”

BMW: “Dear Santa. Can we please have a gift certificate for liposuction, plus another five thousand dollars per unit in 2009 to continue stuffing our lease programs with subvention like a drunk construction worker puts dirty singles in a daytime stripper’s thong? That is all.”

Bentley: “Dear Santa, don’t worry about us. Just stick bags of cash under the trees of rappers, professional atheletes, misguided car collectors and the guys in Brussels who make the rules about CO2 emissions.”

GM: “Dear Santa, Peace on Earth, good will to us. P.S. Who knew you delivered early?”

Chrysler: “Dear Santa, Please can we keep that cloak of invisibility another year?”

Ford: “At this point, we’d just like a chance to continue making the strongest lineup of domestic cars and trucks in modern history entirely on our own, without the constant fear of supplier failure, residual-value collapse, crucifixion in the business press, Stockholm-syndrome Southern senators, suicidal UAW demands, and know-nothing bloggers who swear up and down that they would crawl over broken glass to buy a ‘Euro Focus’ while studiously avoiding doing so much as opening the door of a Saturn Astra. Also, it would really, really be nice if people stopped calling our now-discontinued wood-side luxury pickup truck the ‘Black ‘N Da Hood’. Thanks.”

Eamonn Fingleton is the author of insightful books titled “Blindside: Why Japan is still on track to overtake the US by the year 2000” and “In Praise of Hard Industries – Why manufacturing, not the new economy is the key to future prosperity.” Whoever followed his advice either has committed suicide by now, or lives in a place where sharp objects are banned. Except for Bill Clinton and Ralph Nader, who think Fingleton is a swell guy. In truth, the Tokyo-dwelling Irish author has few friends left. He just found a bunch of new ones: the editors of The Detroit Free Press (Freep).

The Freep was so desperate to find a new scapegoat for The Big 2.8’s woes that they scoured the Internet and found and republished a two-week-old rant on Fingleton’s whacko blog “Unsustainable.”

“Detroit’s problems are partly – but only partly – its own fault,” Fingleton states in his opening salvo. The trouble with Detroit, Fingleton wrote, is not managerial incompetence, greedy unions nor wrong cars. Blame those numbnuts in Washington who failed to lock-out the foreigners. Without foreign competition,  Detroit would be just fine.

“For 40 years the Detroit companies have been systematically undermined by foreign competitors’ predatory pricing in the U.S. market,” writes Fingleton. Whoever priced an import lately will beg to differ, but neither Fingleton nor the Freep are fazed.

The theorist then asserts that the Japanese “have kept their home market as a protected sanctuary, operating in cartel fashion and free from effective foreign competition.” As in: if the market be open, the Japanese would all drive Chevys. Living in Japan, Fingleton must be blind. But let’s play the numbers game…

Statistics from the Japan Automobile Imports Association show that the island nation imports some 300K cars a year. The U.S. only accounts for 15K of model year 2007’s imports, including, of all things, HUMMERS (favored by the Yakuza.)

According to Japan’s Automobile Inspection Registration Association, Mercedes makes the most popular imports, with 633,402 on the road. Next up: VW, with 623,089. And a little less than 200K units later, BMW accounts for 489,106 cars in the land of the rising yen. (We’ll get to the yen part soon.)

In Fingleton’s original piece, these statistics were misrepresented as “two German manufacturers, Mercedes Benz and BMW, enjoy token positions.” The Freep wisely (or maliciously) left it out. It would have begged the question: how many American cars are on the road in Japan?  In all, just 50K Chevys. That’s less than 10 percent of Mercedes’ total. Not including 1473 of the aforementioned HUMMERS.

At some point, it should have dawned on Fingleton and the Freep that American exports have been on the rise. According to the Federal Reserve Bank of Chicago, “exports of light vehicles have increased by 52% since 2002, with exports of new vehicles up 21% and exports of used vehicles up almost fourfold.” Ignoring that factoid, Fingleton fingers another culprit for Detroit’s dementia: “the unrealistically high dollar.” Excuse me?

Until July, the greenback was so dirt cheap, that – damn the real estate crisis – there was a bubble in Manhattan condos, snapped-up by the Euro trash with wildly depreciated greenbacks. And now the dollar is heading back down, in the “unrealistically low” direction last seen in July.

The unrealistically weak dollar had its effect. “Between 2002 and 2007, exports to the NAFTA countries actually fell by 5%,” writes the Chicago Fed. “In contrast, Europe received 52% of the net increase of 287 thousand in new vehicle exports over that period; the Middle East accounts for about 40%.”

The rise of the Japanese Yen is the talk of Tokyo. Fingleton must not be just blind, he must also be deaf.

The Nikkei writes today: “The yen’s steep appreciation and the global economic meltdown have turned the tables on Toyota Motor Corp. and other Japanese manufacturers that had sought growth in foreign markets in recent years.” Even the Financial Times, which certainly is not biased towards Japan, concedes that “Dented consumer demand is exacerbated on the bottom line by the strong yen , which lopped a third off Toyota’s November forecast operating income.”

“So, yes, the U.S. car industry’s fate reflects in large measure American incompetence,” Fingleton’s piece ends, undeterred by simple facts. “But the main source of this incompetence has not been the engineers of Detroit but the opinion makers of New York and Washington.”

Apparently, even the Freep must have come to the conclusion that the $17.4b of taxpayers’ money is the last Detroit will ever see. The begging has ended. So let’s throw dirt at those who gave. Let’s demand quotas. Let’s demand a Detroit cartel. Let’s demand high prices.  Let’s demand inflation. Nothing short of a full frontal assault on the forces ranged outside Fortress Detroit will save the Big 2.8. At least, according to Fingleton and the Freep.

Last Friday was a good news day for Detroit. No, I’m not talking about President Bush’s loan package. That wasn’t so much good news as a stay of execution, with a case on appeal. And it wasn’t shadenfreude. What joy can anyone in the auto biz take from the reports that previously invincible Honda is losing money and cutting production? Or that Prius sales are down 50 percent, Toyota has suspended work on their proposed Prius plant in Mississippi, and the company will have a loss this fiscal year, the first in 71 years? No, the good news came, from all places, The Michigan legislature.

The august body passed legislation funding projects that could help the city of Detroit recover economically. What got the most attention, both from the general media and from car folks: a $288m dollar plan between the state, the city of Detroit and Wayne, Oakland Macomb counties. The partnership will improve and expand Cobo Hall (by 166k sq. ft.) to provide more space for exhibitors and allow Detroit to keep the North American International Auto Show (NAIAS). The refreshed and enlarged Cobo will join the newly renovated Book Cadillac hotel in the effort to increase Detroit’s convention business.

The legislature also funded a 3.5 mile light rail transit system to link the New Center area and downtown. This will also help convention business, as well as nurturing the nascent development along the Woodward corridor in recent years.

Otherwise, meanwhile, let’s face it, it hasn’t been a good year for the Detroit auto show. Nissan/Infiniti and Mitsubishi dropped their factory displays. Porsche, Land Rover, Ferrari and Rolls Royce pulled out entirely, That’s notwithstanding the success of last year’s “Gallery” program, which gave hundreds of well-heeled guests from around the country a private showing. A marketing event that racked-up a reported $3m worth of luxury car sales.

In a speech to the Detroit Economic Club, NAIAS’ senior co-chairman acknowledged the “dire times” facing the auto industry. Joe Serra sold the silver lining, asserting that the departing manufacturers had opened the door to other companies who wanted in. In fact, Serra said the total number of exhibitors on both floors will increase by two, and there will be more world premieres this year than last.

Still, this year’s NAIAS will be a low-key event. The New York Times reckons you can tell how the domestic auto industry is doing by the size of the shrimp at the Detroit auto show media preview. This year, swag shrimp of any size will be few and far between. Chrysler will forgo their usual showbiz introductions; all the manufacturers will have simpler displays. They’ll be fewer pretty girls, less glitz and more focus on product and business plans.

That said, the incrementally increased number of exhibitors will be displaying cars of particular interest to enthusiasts. The Bugatti Veyron will make its first ever NAIAS appearance. Lotus will have its first factory NAIAS display.

The success of the Elise and derivatives, as well as Lotus’ involvement in the development of Chrysler’s EV sports car, makes a NAIAS booth for Lotus a natural idea. Technology partner and electric car pioneer Tesla will have also have its first Detroit auto show factory booth, hawking their lithium-ion-powered Roadster. Self-appointed Tesla CEO Elon Musk will be speaking to the Society of Automotive Analysts at a NAIAS related event on January 13.

Also on the electric car front, Chinese automaker BYD plans to use the NAIAS to introduce a serial hybrid with a 60-mile batteries-only range. BYD produces about 25 percent of the world’s cell phone batteries, so they may have a leg up on other manufacturers’ electric plans. China’s Brilliance Auto will display for the first time. Along with BYD, Brilliance will be the first Chinese manufacturers to display on the main floor in Detroit.

Meanwhile, there’s other game afoot. To keep Michigan in the running for tomorrow’s battery technology, the state legislature approved a tax credit package intended to make the state a national center for the development of batteries for transportation. The bill will provide up to $335m in tax credits from 2001 to 2016.

Legislators and Gov. Granholm hope that the tax credits will help Michigan businesses access the $1b that Uncle Sam’s investing in battery research. While it would be better if the news was about private sector investment instead of government funding, it’s nice to see the state and federal government offerring local industry and innovation a helping hand.