Critics of Chevrolet's upcoming plug-in gas-electric hybrid Volt fail to realize one thing: it doesn't matter if the car isn't perfect. It doesn't even matter if the Volt fails to achieve ANY of its much-hyped metrics: price, range or reliability. It's what happens AFTER GM's Hail Mary is released that counts. If GM can keep plugging away (so to speak) on the Volt, they could, eventually, offer a genuine competitor to the the all-conquering Toyota Prius. One need only look at the fiddly roof still blighting the once red-hot Pontiac Solstice to know the odds of this happening are not high. Or, alternatively, contemplate GM's new product development history vs. the genesis of the Prius.

Back in the late 1980s and early 1990s, academics investigated why Japanese companies in general, and Japanese auto companies in specific, were doing so well. A key finding: while American companies tended to think the choice was between a breakthrough, “leapfrogging” product and more of the same, Japanese companies often pursued a “rapid inch-up” strategy. With the latter, you get a reasonably good product at a viable price to market, learn from the process, then follow up with an improved (if still not perfect) product. Lather, rinse, repeat.

Companies seeking a "moon shot" breakthrough are much more likely to get discouraged, ball up the entire effort, and start over from scratch. They miss the basic rule: companies that aim for and achieve a series of base hits with innovative products often end-up outscoring those that alternate between swinging for the fences and sitting it out.

Japanese companies have had a further advantage: a significant number of Japanese "early adopters." These consumers are willing to buy bleeding edge technology for its own sake. They’ll pay well over the odds for an imperfect innovation– as long as it’s more advanced than any available alternative. That goes double if the new technology can be conspicuously consumed. Lest we forget, the Prius was originally developed for Japan, not for Hollywood.

Are these purchasing decisions rational? In isolation and in strictly financial terms, no. But when people buy a new technology, it gives the manufacturer the learning experience and financial means to launch continuous improvements and, eventually, benefit from economy of scale. The rest of us eventually get an improved, less expensive iteration. So, in the long run, these initially expensive decisions make a lot of sense.

Remember all of the arguments against digital cameras? The same process of slow growth leading to a mass market tipping point applied to the Prius– and could well apply to ALL hybrids. Is the Prius perfect? No. Does offer leading-edge technology at a price many people can afford? Yes, as we approach the third generation, it does. 

This is a critical point. Toyota isn’t ready to say, “mission accomplished.” The next Prius, with slightly improved everything, will arrive next year. No doubt work has already begun on its fourth generation replacement.

Compare the Prius' slow and steady march to GM’s failed sprints. Time and time again, they’ve created a car they thought would leapfrog the competition. When it didn’t meet expectations, they cut off investment, often  abandoning the model name. GM didn’t learn from the Corvair-Vega-Cavalier-Saturn (or the less ambitious Cobalt). Each time, they failed to quickly follow up with incrementally improved versions until they got the product right. (The exception that proves the rule: the Chevrolet Corvette.)

Seeking a breakthrough, GM spent a billion dollars to develop the all-electric EV1 (while serving pushrods to the masses). When the EV1 failed to set the world on fire, GM crushed it. Despite the looming Toyota Prius, lost U.S. market share and anti-SUV grumblings, there was no EV2.

True, GM does have its “dual-mode hybrid.” Though technically superior to the system in the current Prius, it was introduced in GM’s most outmoded package-—a large, live-axled, body-on-frame SUV. The enormous cost differential would not be insurmountable to early adopters. But what are the chances of buyers of large conventional SUVs fitting that description? Predictably, GM hybrid SUV sales have been dismal.

There will soon be a dual-mode Saturn VUE. The “dual-mode” variant will look much like regular VUEs, and the costly system could send its price deep into the thirties. But it could work. The key question: will GM continue to iterate even if sales remain low— or will they abandon the dual-mode system entirely when the Volt's E-Flex architecture appears? No points for answering that question.

The plug-in Chevy Volt is, indeed, GM's best hope in this most recent technological arms race. It will come in a distinctive wrapper (we think). It will seat four (unlike the EV1). On the downside, it's increasingly clear– thanks to Car Czar Bob Lutz' shrug at a recent test of a Volt mule– that GM's Hail Mary won't be cheap.  Again, so what? The more important factor: does GM have the will (and financial ability) to learn from the experience and persevere through the inevitable setbacks to continuously improve upon the initial effort and bring the costs down?

We shall see. Meanwhile, critics of both the Prius and the Volt don’t get it. They knock the vehicles for failing to meet their expectations for a paradigm shift. By so doing, the naysayers delay the very things they claim to want.

Fantastic products rarely emerge from the lab fully-formed, like Athena from Zeus' head. And if everyone waited for perfect products, and criticized anyone who didn’t do likewise, we’d still be riding horses. The best possible products evolve over time when persistent visionary companies team up with technophilic consumers to engage in continuous innovation. At which point the naysayers say, “Now it’s good enough for me,” without the slightest sense of hypocrisy.

Few things in this world are as dramatic as the start of a NASCAR race. War, for instance. Or the launch of a Saturn V rocket. The crowd rises from their seats in anticipation. The starter stands in his box with flag in hand as the bestickered phalanx of cars rounds turn four. After the pace car scurries from view into pit lane the violence of dozens of highly tuned V8 engines is unleashed in unison. You can sense the invisible force of the sound approaching.  Like others, I reverently remove my radio headphones so that I can fully ingest the aural assault. I feel the high frequency vibration in the aluminum stadium seats beneath my feet. And then it hits – a sound so big I hear it with my entire body. You don’t get that on TV.

These starts, which are repeated after every caution, are like hits of crack to NASCAR addicts. Add the excitement of aggressive bump-n-grind driving, a few spectacular crashes, and a dramatic finish, and the crowd could care less that the racers only turn left.

My latest foray into NASCAR society occurred at the Craftsman Truck Series Sam’s Town 400 at the Texas Motor Speedway (TMS) with my youngest son. Forget every exaggerated stereotype you might have of NASCAR fans. Real Truck Series fans outdo them all. A regular NASCAR car event looks like an NAACP convention compared to the gene pond from whence Truck Series fans hail. Equally homogeneous: the choice of vehicle that they drive to the stadium. That would be pickups.

TMS speakers blared alternative metal music while fifty-one thousand patrons found their seats. I don’t guess that many in the crowd have songs by Disturbed, Slipknot, or Mastodon on their iPods at home, but somehow the music is an appropriate prelude to thirty-five 700 horsepower 358 cu-in pushrod V8 engines screaming at full voice.

As second hand cigarette smoke wafted all about us, my host, a longtime Texas Motor Speedway season ticket holder, commented, “I know I need to lose a few pounds but in this crowd I feel skinny.” I don’t mean to disparage my fellow racing fans. They are what they are and proud of it. They’re knowledgeable of the sport and quite hospitable– that is unless your last name is Busch (Bush is okay). As in Kyle Busch, the most hated man in North Texas.

Busch is vilified as a dirty, nay evil, driver. Boos erupted as the man sporting a black cowboy hat was introduced. The NASCAR points leader was set to start in last position because he was a late driver change for the #51 Miccosukee Resorts truck. He was also in the midst of a very busy weekend, attempting to win a trifecta of races in three different classes at three different tracks on the same weekend. Pre-race gossip centered on the scandalous prediction that the bad boy had made before the race; that he would break into the top ten within the first fifty laps.

NASCAR Craftsman Truck Series pickups share little in common with the Chevy Silverado, Ford F-150, Dodge Ram and Toyota Tundra pickups that share their names. Sponsors such as Lumber Liquidators, Construction Corps, Power Stroke Diesel by International, Road Loans, and, my favorite, GunBroker.com, reflect the rural working class values. 

Pole position went to newcomer, Justin Marks. After the first dozen laps, five trucks withdrew due to mechanical problems. The race fell into a predictable rhythm: race for about twenty laps (until tires become worn), crash, pit under a caution flag, cleanup, lather, rinse, repeat.

Ron Hornaday Jr. in the #33 Camping World Chevrolet emerged early in what appeared to be the fasted truck in the field. True to his word, Kyle Busch made quick work of the rest of the field. By lap 55, Busch was in the number nine spot. From that point forward he seemed content to lurk between fifth and seventh place without pressing the leaders.  But every spectator knew where he was at all times and that he could surge to the top at will.

With eleven laps to go, Busch leapfrogged into second place. Tension built for an epic battle. Concerned fans held three fingers high with both hands in support of #33 Hornaday. This night good triumphed over evil. Hornaday’s car was just too fast; reaching the green-white-checkered flag 0.283 seconds ahead of Busch.

As for my son and me, we had a great time. And although our seats were nestled in the shade beneath the luxury boxes I think my neck turned a little bit red.

It's been a bit over six months since you, our Best and Brightest, picked 2007's Ten Worst Automobiles. A lot's happened in the industry since then, not much of it good. SUVs are out and econoboxs are in, gas prices are insane and manufacturers are closing factories and realigning those left. To lighten the mood during these dark days, let's see how our biggest losers have fared amidst all this turmoil.

10. Saturn ION:  RIP

The lame duck ION waddles off the field of battle without achieving any glory whatsoever.

The last of the plastic-paneled Saturns (and some would say the last real Saturn) is dead, replaced by a more expensive badge-engineered Opel Astra. It could have been much more than it was. But it wasn't, so good riddance.

9.  Chrysler Aspen: Selling, but why?

A cynical repackaging of the Durango, complete with an arthritic suspension and interior appointments you're best advised not to keep.

Aspen's sales are, inexplicably, 12.4 percent higher so far this year than last. Maybe the cut-rate gas program is duping enticing people to sign-up for six years' payments on a vehicle they won't be able to afford to fuel after three. There's a HEMI-engined hybrid Aspen variant on its way, but they're still closing the plant in 2009. Good move.

8.  Chevy Trailblazer: Going, going, not gone 

Trabant-class fit and finish and Yugo-compatible interior design

Sales of this antediluvian artifact started dropping well before gas prices started climbing. However, with a 145-day supply on lots at the start of April, $4/gallon gas the norm and SUV sales lower than a politician's credibility, it may be a long time before they disappear, even after Bowtoy Boys pull the plug on production in 2010.

7.  HUMMER H2: on the chopping block

You might as well wear a freshly-bludgeoned baby seal as drive this big rig.

GM sold all of 375 humongous H2's in May. They'll be selling even fewer in the future– now that GM's decided to ditch the Antichrist of the eco-movement. Rumors that someone will buy the HUMMER brand in today's crowded, cratered SUV and off-road market are almost as ludicrous as the H2.

6.  HUMMER H3: following big brother's footsteps

Thirstier than Lindsay Lohan fresh out of rehab, slower than continental drift and rougher than Class VI rapids.

Even though the H3 doesn't get much worse mileage than other small SUVs, the HUMMER stigma alone is enough to cause buyers to shun it. It'll also be gone when they pull the plug on the HUMMER brand.

5.  Chevy Uplander: Gasping its last breath 

The only remnant of GM's po-faced assault on the minivan market can't hit the ash can of automotive history soon enough.

Chevy's pulled the plug and is closing the plant responsible for this automotive abortion. If you just have to have one of the worst minivans ever built, dealers still have about 2700 in inventory. And will for many months to come.

4.  Dodge Nitro:  Selling like ham at Hanukkah

A four-wheeled testament to Chrysler's brand mismanagement and thoroughly inept product development.

Buyers seem to agree with our assessment. Nitro sales are down 32.2 percent; Jeep dealers had a 110-day supply as of April 1. Chrysler co-president Jim Press said his employer's going to eliminate duplicate products to streamline their product line. Start here!

3.  Chevy Aveo:  Cheap sells, at least for now

GM can't build a decent small car in the U.S., perhaps they're trying to demonstrate that they can't build one in Korea either.

A rising tide lifts all boats; Chevy's craptastic captive Korean has caught a ride on the coat tails of the American revolution against SUVs and pickups. If you need proof that consumers are desperate to buy a fuel miser, any fuel miser (even a not-so-miserly miser), well, here it is.

2.  Chrysler Sebring:  A born rental car

Its cabin, handling, acceleration, and ride quality are to driving pleasure what hair shirts are to eczema sufferers.

This car has such a bad interior they started a special project to re-do it after just one year. Chrysler says they're cutting sales to fleets and rental companies and it shows: Sebring sales dropped almost 31 percent in May compared with last year.

1.  Jeep Compass: Wannabees never go far

Jeep's recipe for disaster: laughable aesthetics, second-rate road manners, poky performance and interior materials pulled from the bottom drawer of Chrysler's parts bin.

Sales of the Caliber-based anti-Jeep are trailing last year by 13.3 percent. What else would you expect for a vehicle that can't handle much more than a dirt road yet tries to pass itself off as a Jeep? A reader reports that a salesman said the Compass will die in 2009. Another excellent idea.

In a few months, we'll be soliciting nominees for the third annual Ten Worst Automobile awards, naming and shaming the most lamentable cars for sale as new in 2008. Will Compass, Aspen, Aveo, and H2 score a three-peat? Time– and TTAC's Best and Brightest– will tell. 

Detroit's not flying the white flag just yet, but you can hear the unmistakable sounds of unfurling. Post Black Tuesday, GM CEO Rick Wagoner set about painting General Motors as a victim of unforeseeable circumstances; the switch from truck to car sales was faster than "anyone" could imagine. Chrysler CEO Bob Nardelli simply said everything's fine– a sure sign that nothing is. And earlier today, Ford President Mark Fields pleaded for government intervention to protect/create a domestic electric vehicle battery industry. Clearly, finally, The Big 2.8 are thinking ahead. To government bailouts.

Chrysler will be the first to file for Chapter 11. Ironically, the ailing automaker's also the least likely to receive government assistance. Yes, the feds bailed out Bear Stearns. Yes, the U.S. government provided Chrysler with hundreds of millions in loan guarantees the last time ChryCo was up against the wall– and received handsome rewards for Lee Iaccoca's rescue. But that was then. This is now.

Chrysler owners Cerberus don't want an auto company-shaped millstone around their neck. Any pretense that the private equity firm bought Chrysler to run as a going concern will disappear the day they file. Cerberus will use C11 to break-up the company, sell what it can, sue Daimler, settle out of court and run in the opposite direction. You want federal subsidies/guarantees/loans/whatever to keep this sucker afloat? YOU get ‘em.

No doubt Chrysler's new new owners will receive some kind of public assistance. But the idea that the entire company can be saved will be jettisoned by everyone except the unions– who'll take what they can get.

Even if the Chrysler's dissolution gives GM and Ford a dead cat bounce– and frankly, who could tell in this market?– GM will crank-up its lobbying efforts for government assistance. Massive hybrid tax credit for the electric – gas Chevrolet Volt? It's a given. Credits for "resurrecting" old factories will also reappear. In fact, all the creativity that should have gone into GM's cars will flow into shaping a massive, green-tinged begging bowl.

And then, catastrophe. All these bail-out band aids cannot staunch GM's wounds. The company will have to file. At that point, the tax-funded pity party will REALLY start.

While America doesn't need a nationalized automobile industry any more than England did, there's no question GM will find a willing partner in Washington. For one thing, bailing out Detroit will mean bailing out Michigan. The state is [still] too large and too powerful to let sink beneath the Great Lakes under the weight of a total GM failure– despite massive complicity. For another, the political narrative is pretty compelling. It's not just Detroit that's on its knees (so to speak), it's AMERICA! Let's keep America rolling! (Again.)

Of course, the southern states, where the transplants frolic, will be none too happy watching their patrons' profits attacked by federally-subsidized domestic competition. So there will be conditions placed on these subsidies/guarantees/loans/whatever. Lots and LOTS of conditions.

The days of excessive trough snuffling (i.e. Rick Wagoner's $14.4m annual pay packet) will be finished. Pay will finally be tied to performance. Current management will get a bit of a tongue-lashing on the Hill by the aforementioned southern reps, but the Powers that Were will drift off on their golden parachutes with their money and yes, pride, intact.

The unions will demand– and receive– job guarantees. The feds will stipulate that none of the money provided can be spent building cars overseas, including Mexico and Canada. While GM will sleaze this– building overseas cars here, importing parts– this stricture will condemn GM to complete oblivion. But hey, you can't fight the will of the working man.

And if that's not enough to turn a mediocre car company into an entirely non-competitive corporate entity, there will be enough embedded green initiatives to plant a good-sized forest. The word "sustainable" will echo through the loan agreement like a cannon fired in the Grand Canyon– with about as much effect on the environment.

I'd like to think that a new GM will rise from the ashes of the old. But it seems obvious to me that neither GM's custodians nor the feds will have the foresight, courage or political will to do what really needs doing: the breakup and sale of all GM's brands.

That strategy would "save" GM by destroying it. The talent locked-up within GM would be freed from the stifling, overarching bureaucracy, to emerge in a focused and streamlined fashion. But a life-saving break-up would require a fundamental shift in public consciousness. A politically incorrect recognition that the American free market cuts both ways; helping the losers weakens the system, rather than improves it. You can't create competitiveness through legislation any more than you can outlaw it.

It's a lesson GM will learn soon enough, one way or the other.

May was a disaster for American new car sales. Practically every player in the U.S. market ended-up the month trailing last May's totals, many by a significant margin. Perhaps the most damning indicator of the industry's general direction: the F-150's sudden and precipitous drop from the top sales spot. Ford's full-size pickup wasn't just edged out; it was defenestrated by four different cars. The Civic, Camry, Accord and Corolla all mounted the Mother of All Palace Coups. With gas prices singing "the only way is up," clearly, May is only the start of a long, hot, bloody summer.

Trucks

Overall light truck sales fell 24.5 percent from last May. The Chevrolet Silverado* led the drop in pickup truck sales, down 42 percent in May, down 25.9 percent year-to-date (YTD).  The Dodge Ram slid by 37 percent for the month, 26.8 percent drop on the year. Ford's F-Series' tumble from the top of the U.S. sales chart was appropriately dramatic: down 30.6 percent in May and 18.7 percent from the first five months of last year. The Toyota Tundra turned-in its first negative month last month. May saw no respite (obviously); ToMoCo's full-sizer finished the month down 31.5 percent. Strong sales earlier in the year have kept it above the red line year to date; sales are still 8.5 percent ahead of last year.

Truck-Based SUVs

Traditional SUVs are dying, with one notable exception. Chevy's Tahoe* continues its fall from grace, dropping 39.7 percent in May, 29.9 percent YTD. The Dodge Durango has just about disappeared from view, "boasting" a 68.8 percent drop in May, down 44.2 percent for the year. The once all-conquering Ford Explorer is barely selling. Sales are down 41.2 percent in May, negative 28.7 percent for the year. Interestingly, the Toyota Sequoia is up 81.7 percent compared to last May, up 29.4 percent TYD. It's already outselling the Durango. If these trends continue, by the end of summer, Sequoia sales could easily eclipse the Explorer and Tahoe.

Crossovers

Here's news: buyers abandoning pickups and SUVs seem to be skipping CUVs and going directly to cars. The GMC Acadia lost the big Mo; sales fell for the second straight month vs. last year. Sales cratered 27.6 percent in May; excellent sales for the first three months have kept it  20.5 percent ahead for the year, though. For the first time, The Ford Edge dropped below the previous year's sales, down 2.6 percent in May. Like the Acadia, robust sales earlier this year have kept the annual sales up; the Edge finished May 26.8 percent ahead of the first five months last year. The Toyota Highlander* and Honda Pilot both finished May below May '07, down 9.6 percent and 16.5 percent respectively. The Highlander is still 1.9 percent up on last year, but so far, the Pilot is 14.4 percent below 2007.

Family Cars

The year of the car is finally here. Almost every mainstream passenger car showed increases in May. Chevy's Malibu* fell slightly from last month, but still ended up 39.1 percent ahead of May '07, up 25.7 percent YTD. The Chrysler 300 was the exception that proved the rule, finishing May down 52.9 percent, 30.7 percent YTD. (Chrysler attributed the drop to decreased fleet and rental sales.)  Ford Fusion sales were up 26.7 percent in May, up 10.5 percent YTD. May was the Toyota Camry's best month in 2007. May 2008 saw a 2.3 percent increase on that high water mark; annual sales rose 2.3 percent. The Honda Accord continued its trajectory, rising 37 percent in May, 8.3 percent YTD.

Compacts

Chrysler's bright spot: the Dodge Caliber. Sales were up 6.7 percent in May, 9.2 percent YTD. The redesigned Focus was Ford's biggest grower, jumping  53.2 percent in May, running 35.7 percent ahead of last year. Chevy's Cobalt continued its sales climb, rising 19.2 percent in May, 17.8 percent YTD. The best selling vehicle in May was… the Honda Civic*.  Civic sales were up 33.3 percent in May, 20.2 percent YTD. The Nissan Sentra finishes its third straight month of sales increases with a 9.6 percent jump May, 6.9 percent YTD.  Toyota's Corolla also had a good showing in May: up 16.8 percent. A slow start on the year means the Corolla's still trailing last year by 8.1 percent YTD.

Subcompacts

Chevy's Aveo sales dipped drastically in February and March but they've increased steadily ever since. It's up 44.3 percent from last May, up 2.3 percent YTD.  The Honda Fit made a huge jump, up 53 percent for May and 64 percent YTD. Nissan's Versa rose 14.8 percent from May 07, up 21.5 percent YTD. Toyota Yaris' sales rose 31.5 percent in May and 50.4 percent for the year to date.

Prius

The Toyota Prius turned in a shocking performance in May. In spite of soaring gas prices and consumers' increasingly "green" mindset, sales dropped 37.5 percent in May. Toyota [credibly] blames a shortage of cars on the ground. Regardless, sales are still up 3.8 percent YTD.

By Manufacturer

GM finished May 27.5 percent below last May, down 15.9 percent YTD. Chrysler was down 25.4 percent on the month, 19.3 percent on the year. Ford fared better, with "only" a 15.9 percent drop for the month, 11.2 percent drop for the year. For the fourth month this year, Toyota turned in a sales performance below the same month last year . This time, ToMoCo was off 4.3 percent for the month. They remain 3.5 percent below 2007 YTD. Honda was the only one of the "top five" automakers to finish both the month and year in the black. HoMoCo was up 15.6 percent on the month and, up 4.8 percent on the year.

Total Sales

GM, Ford, Chrysler and Toyota are closing truck plants and scrambling to convert truck lines to build cars– now that they've finally realized that truck sales aren't going to improve any time soon. As the model year starts winding down, you can count on even bigger incentives on trucks and SUVS as manufacturers try to clear out their inventories and make room for the cars everyone wants. Will they all make it to the end of the summer? Good question.

*Sales numbers include hybrid models

As GM’s FastLane and GMNext blogs have demonstrated, the U.S. automobile industry has fully embraced the concept of blogging– as press release. Toyota, of course, has entered the e-fray. Their Open Road blog may do little (as in nothing) to stretch the boundaries of Web 2.0-itude, but it offers the usual insight into the corporate culture from which it sprang. ToMoCo’s plugging the new Venza crossover, designed to fill the gaping hole in their lineup between the Camry, RAV4, Highlander, FJ Cruiser, 4Runner and Sienna. Into the depths we descend…

As you might expect, we keep close track of the search terms and key words that people use to get onto the Open Road.
You're shitting me.

You may be interested to learn that the Number 1 search word is "Venza."
If "Venza" is the number one search word bringing people to the Open Road blog, then you're not managing your website correctly. When people search for Venza, you should be sending them directly to the Venza microsite, not to the lame "Open Road Blog."

You remember Venza, right?
Honestly, I try not to. There are already plenty of crossovers out there.

It's a stylish car
Uh, if you say so. I'd go with "vehicle-ish vehicle." But we've already discussed the weird styling.

that was designed
by a monkey?

to capture the best characteristics of both the  roomy SUV and the efficient sedan.
Like a car, but with a hatch on the back. We could call it a "hatch back." Or maybe station wagon.

But the worst part about the Venza is that the exterior is bigger than it needed to be. A sedan, wagon, or hatch can be just as roomy as an SUV. It's the raised ride height that they have brought in from an SUV here, and they should be up front about it. There are benefits to it – SUVs can be easier to step into from the ground. But it also trades off a huge part of the efficiency, in size and weight.

Just sayin’…

We unveiled the Venza in January at the Detroit Auto Show, and we posted it here on Open  Road on January 15.
Please come Monday for the next meeting of History 204: Recent Toyota Marketing

You can go to our Jan. 15 post by clicking here.
You're on the Internet. You probably love five month-old news.

Now the real deal is coming in a few months, and since there's been so much interest,
Bullshit. This isn't the Camaro or the new Camry or a new Evo.

we wanted to provide a way for you to see the vehicle, and to learn more about it.
It's a public service, really. Thank you notes can be sent to: Toyota HQ, Snorefest, Ohio. 11101.

It's the Venza minisite at Toyota.com, which you can access by clicking here.
We did a press release a week or so ago, but why not plug it again?

What you'll find when you get there include, naturally, photos of the car.
I'd post them here, but then you wouldn't visit the microsite. Go to the microsite. It's like a site, but micro. As opposed to this site, which is not micro. Big site here. Plenty of space for pictures, like of the Venza. Oh crap.

But there's also an interview with its designer,
Nobody cares. Consumers don't give a crap about this. But hey, Toyota needed content to put on the microsite. Did you hear they have a microsite?

a list of specifications and features,
But not the gas mileage, which is the only reason this vehicle is significant. The whole point of the Venza is "crossover space, Camry mileage." So what's the mileage estimated to be? And what's the horsepower output and 0 – 60 time of the four-cylinder engine?

and a couple of interesting videos that detail the design process
Nobody cares. Consumers still don't give a crap about this.

and tell us some interesting stuff about the car's optional V6 engine.
Interesting stuff? Wow, that sounds amazing. I better rush over to the microsite. Microsite!

Oh and by the way, unless it's gas mileage or horsepower numbers, most consumers don't care. They began this blog post talking about how they're getting people from search engine results. You think those people are interested in the optional V6's variable valve timing?

There's also a place for you to sign up for updates on the vehicle,
Really? I love marketing mail. I want to hear more "interesting stuff."

which is set to make its sales debut later this year.
I'm sweating with excitement.

So go ahead, take a look.
I have permission? NICE! I'm going right now. Screw work.

Then tell us what you think.
We care. We're people people, damn it. Can't you people understand that?

Back when Cerberus bought Chrysler from Daimler, the new owner’s spinmeisters were highly animated. “We’re quicker than quick,” they proclaimed. “Our private equity owners don’t answer to The Street. We can make decisions– and get things done– fast.” The party line was designed to counter fears that Cerberus had bought-in simply strip-and-flip Chrysler. Uh-uh. They were going to restructure the ailing American automaker. Right now. And then… nothing. As Billy Preston said, nothing from nothing leaves nothing. 

There’s plenty of mystery and inconsistency surrounding Chrysler’s short-term future. Several suppliers tell us ChryCo’s changed payment terms from 45 to 60 days, and unilaterally lopped-off five percent from their bills. We know of one supplier that’s owed millions, that hasn’t been paid in months. This indicates a severe and entirely predictable cash crunch for a company whose CEO admitted (just four months after Cerberus’ purchase) that his employer was “operationally bankrupt.” 

But Chrysler’s paying other vendors the full amount owed, on time. And one of our Best and Brightest reports that Chrysler’s upped its seat orders for minivans, Dakotas, Journeys and some Jeeps.  At the same time, we hear rumors that Chrysler will file for Chapter 11 by August, to maintain the option of suing Daimler for selling them a bill of goods. And yet Chrysler’s trotting-out octogenarian legend Lee Iaccoca to rally the troops. Why bother with the warm fuzzies if the pink slips are at the printers?

But it’s what Chrysler HASN’T done that’s the real news. Two months after Jim Press left the top of Toyota to join the over-moneyed executives in Auburn Hills, the nets were all abuzz with model termination. Sure enough, Chrysler Pacifica, Crossfire, convertible PT Cruiser and Dodge Magnum were lopped off the dealer menu. Chrysler signaled that there was carnage more to come. Only… there wasn’t. Despite journalists’ helpful lists of DOA-mobiles– Jeep Commander, Dodge Durango, Jeep Compass, Dodge Nitro and so on– the models are still in production.

That’s as far as anyone knows. Sales of these vehicles are so far down the rat hole (e.g. Durango sales down 68.8 percent in May), their inventories are so large (e.g. there’s a 117-day supply of Jeep Commanders), that Chrysler could stop building them without much impact on, well, anything. With GM closing four truck plants and Ford slicing production as fast as it can, you’ve got to wonder why Chrysler– the “quick one”– doesn’t cut bait and fish. Where’s their “cut your way to prosperity” turnaround plan?

Chrysler can’t afford it. Lest we forget, GM and Ford are paying mega-billions to buyout their excess union workers. ChryCo’s private equity owners have deep pockets, but any large-scale effort to downsize their automotive holding would force them to borrow big bucks, miring Cerberus even deeper into their Chrysler quagmire. Clearly, sensibly, they don’t want to go there.

Besides, the REAL game is strip-and-flip. (Always has been.) Why commission wholesale structural changes when you’re going to break up the parts and sell them off? A lick of paint for curb appeal (i.e. a hybrid or something) and Bob’s your uncle. Alternatively, if Cerberus’ longer-term dreams of The Mother of All strip-and-flips have become a cash conflagrating nightmare, Chapter 11 protections will give Chrysler’s eventual owners the freedom to kill models, shutter factories and “modify” union contracts. Call it the “screw this, we’ll unload this thing as a fixer-upper” strategy.

Again, the signs coming from Chrysler are not clear on ANY of these points. Why would they be? Cerberus didn’t get to a size where it could afford to buy Chrysler (at a whacking great discount) by telegraphing their every move to the press or, for that matter, their own employees. We’ll just have to watch the signs– Company-wide summer break? ResCap going under?– to see if and when Cerberus says draws a line under this misguided misadventure.

In that sense, the real question here is whether or not Cerberus is at the point where they’d rather take a hit to their reputation than a hit to their finances. This makes Chrysler’s immediate future a contest between expediency (i.e. greed) and ego (i.e. hubris). While I don’t think that the fact that Chrysler is purposely mistreating some of its suppliers indicates that the company is preparing to pin the blame on the donkey, as some of our commentators have suggested, it does tell us that the end game is near.

There's no question in my mind that Chrysler is headed for dissolution. If Cerberus was going to “save” Chrysler they would be doing something, anything to that end. Never mind all the announcements about foreign partnerships. Black Tuesday has revealed that the time to act is now. (Well, three years ago.) Chrysler’s silence speaks volumes. It tells us the once-proud automaker’s final chapter is about to be written.

Saturn is dead. Despite a thoroughly refreshed line-up– including a mild hybrid, a Lambda-dancing CUV, a sexy sports car and a cute ute– the brand can’t get wood. In fact, Saturn’s sales are the very definition of flaccid. Year-to-date, they fell 19.9 percent. In May, sales sank 32.7 percent. In this process of final dissolution, the once autonomous upstart GM brand has become an irrelevant Opel outpost. Saturn’s Spring Hill, Tennessee factory is now in Chevy’s hands. Plastic body panels and unique designs have been swapped for rebadged leftovers from the GM parts bin. Saturn’s slow homicide is more than a shame. It offers a discouraging glimpse into General Motors’ dysfunctional culture.

The Saturn brand was GM CEO Roger Smith’s $5b excellent adventure. Both internally and externally, GM sold its new brand dawning as the American automaker’s import fighter. And why not? The company’s homegrown initiatives to repel the import invasion– the Corvair, Vega, X- and J-cars, etc.– all flopped spectacularly. Equally important, Smith recognized the cultural paralysis within his own Empire. Something had to be done.

Saturn’s mission: drag GM kicking and screaming into the twenty-first century, the new era redefined by The General’s foreign competition. To do the deed, GM’s re-boot boasted all the hallmarks of the Toyota Production System– just-in-time inventory management, lean manufacturing methods, flexible job classifications– combined with plant automation that could eventually render the United Auto Workers irrelevant. In tandem with the California-based, joint NUMMI operation (with Toyota), Saturn would reinvent GM, if not the entire automotive business.

Smith singularly failed to cultivate the organizational buy-in necessary to implement the plan. Managers fond of rejecting anything remotely Japanese considered Saturn a parasite sucking resources from their pet projects. UAW leaders knew that Smith would use his beloved robots to sign their pink slips if given the chance.  Smith’s efforts to expand centralization and badge engineering among the existing divisions and his abrasive personality only deepened bureaucratic resentments.

Despite the acrimony, Saturn fulfilled its initial promises. Reviews were favorable. Buyer loyalty for the no-haggle proudly domestic car brand achieved cult-like status. But internal politics sealed the marque’s fate. Smith retired in 1990, just as Saturn’s first cars were launched.  Robert Stempel, Roger Smith’s loyal successor, resigned only two years later. As its champions disappeared, Saturn floundered no sooner than it had begun.

Saturn’s limited, aging lineup quickly stagnated. Sales peaked in 1994 at 286k units, well short of the 500k goal. In fact, 1993 was Saturn’s only profitable year.

Jack Smith became CEO following Stempel’s ouster.  Clearly no relation to Roger, the new Smith dismantled the trappings of his namesake’s regime. GM’s standby strategies favoring cost cutting and large, low R&D vehicles were restored. Smaller cars, sad aberrations best left to foreigners, would be obtained from overseas from marques such as Isuzu and Fiat. 

Current CEO Rick Wagoner continued Jack Smith’s agenda. Wagoner also peddled gas guzzlers, although this time to no avail, while completing the rogue Saturn’s dismemberment. If Jack Smith plunged in the knife, Rabid Rick twisted the blade.

Saturn really was “a different kind of company.” But resistance to change is a hallowed tradition within the GM family.

Peter Drucker, the father of management consulting, encountered GM’s insularity as early as 1946. His seminal study, Concept of the Corporation, extolled the automaker’s organizational successes, but advocated increased decentralization and empowerment of line workers. Drucker’s questioning of GM orthodoxy was considered blasphemy. Managers caught with the book were subject to termination. Then-Chairman Alfred Sloan was so incensed he later wrote his memoir specifically to rebut Drucker’s analysis.

Six decades later, little has changed. Success is perceived as an entitlement, deserved after decades of dominance. A not-invented-here mentality and superiority complex make meaningful change nearly impossible. Foreign rivals are still regarded with contempt, their tiny cars mocked as effete trinkets unsuitable to American tastes. Worker autonomy and equitable supplier relations, essential components of successful JIT lean production systems, are disdained for usurping management’s sacred duty of unilateral, top-down leadership.

From management’s perch above, the dismal sales of Aura, Outlook, and Astra confirm the fate of those who dare stray from the General’s path. Ironically, the dying legacy brands are adding to Opel West’s declining stature. Buick’s recent Chinese exploits and the baby boomer buzz of its Enclave crossover raise false hopes for the future of the Buick-Pontiac-GMC trifecta.

The upcoming redesigned 2010 Aura should deliver the knockout blow. GM intends to spoil that party by shackling the attractive Eurosedan with uninspired US-spec drivetrains. With their standalone stores and inadequate corporate support, Saturn’s dealers can expect to pay dearly for that mistake.

Sadly, the next Aura’s misfire will assure GM management of what it has believed all along: Americans don’t really want smaller cars. Caught within the quagmire of Michigan’s splendid isolation, Saturn never stood a chance.

May’s new car sales numbers are in and things are looking bleak for The Big 2.8. Their corporate Spinmeisters can blame a down economy and sky-high gas prices all they like, but sales drops well into the double digits are never good news. Market share declines aren’t exactly glad tidings, either. That said, truth be told, Black Tuesday is actually a good sign. It shows that the domestic automakers have finally “accepted” the market. Whether they’re too late is another question entirely.

I repeat: the domestics’ massive sales drops are a good sign, not a good thing. The car market has been “overheated” for at least the last six years. Chrysler, Ford and GM have all been pushing easy credit, “Toe Tag Sales,”  “employee pricing” and the like all year, every year. Compounding this "stack 'em high and sell 'em cheap" mentality, they dumped umpteen million extra vehicles onto fleets. “Move the metal” was their immutable mantra.

All this discounting “pulled forward” hundreds of thousands, even millions of sales. People used to buying a new car every five years were “trading up” after three. “Ten year” customers were buying in after five. Metal was moved but little or no profits were banked (all those discounts) and a lot of potential buyers were left completely “upside down” (all those fleet sales cratering resale value).

If The Big 2.8 were ever going to sell anything other than light trucks at a profit, they had to let the market “come up for air.” At the same time, they need time to re-tool to build more of the cars– yes, cars– people were bound– yes, bound– to want. And there’s another important reason why they had to ease off the throttle: financing.

Back when the U.S. auto industry was riding high, the domestics’ pet finance companies booked massive profits. Part of this was down to simple structure; a financing unit is little more than a bunch of computers, a phone center or two and a [relatively] small work force, most of whom make a lot less than assembly workers. With that kind of overhead, even fairly small margins can add up quickly. Given the sort of volume The 2.8 can move, those margins multiplied into the stratosphere. 

Sinking sales means fewer loans. So The Big 2.8 bled the finance unit (easy terms and low rates) to prop-up manufacturing. It was an excellent strategy– for going broke twice as fast. Now that credit has been tightened (dodgy loans coming home to roost and all that), the finance arms can finally get on a firmer footing. In fact, sales and profits should return if not rise when the “fire-sale” customers’ cars wear out. This could take a couple of years and would seem to hurt the dealers– but not as much as you might think.

Dealers are conflicted. On one hand, they’re selling fewer cars. Generally speaking, they still make SOME profit, no matter what the discount. So volume is important. On the other hand, they are three to four months (minimum) behind the manufacturers curve on product lines. That’s a fancy way of saying they have a shit load of trucks and SUVs on their lots. Dealers need time to clear space and change their mix. But more importantly, they need to decide whether they want to stick it out at the reduced sales volumes.

For the manufacturers, toughing-out dealers is a major problem. Not because the dealers want to stay in business at any cost. Because they want the best pay-off to get out. The Big 2.8’s dealer deadwood are like holdout tenants in an apartment going condo (or UAW workers looking for a buyout). The longer they wait, they nastier it gets. But the longer they wait, the more they’ll get for leaving.

Bottom line: these sales drops are more of a symptom than a cause. The Big 2.8’s collective collapse is not causing them to finally face reality. The drop is the result of them finally facing reality and giving-up most of their number inflators. 

Fifty years ago, GM had over 50 percent of the entire US market. As of May, the collective 2.8 don’t even hold that much. While that's still a huge slice of pie to bake (about 7.5m cars a year), it’s far below their production capacity. Until Detroit– and by that I mean their ops in Canada, Mexico, Australia, Belgium as well– get their production and model mix in line with the REAL market is (not where they’d like it to be), profits will be… elusive. Meanwhile, there's only one possible way for Detroit to recover market lost share: if and when one of them goes belly-up.

There is an oft-quoted British proverb: “if you find yourself in a hole, stop digging.” We can’t be sure if this is the bottom. As bad as it looks, at least the boys from Detroit have stopped digging– about two years late. 

In the July issue of Car and Driver, the BMW M3 coupe beat the Nissan GT-R in a comparison test.  I couldn't understand how this happened, or even why they'd be comparing the two, until I found a copy of this letter:

Dear Nissan,

You may have noticed (we hope someone does) that BMW's M3 beat your GT-R in our recent "Vision Quest" comparo. We want to apologize for this. Please don't feel bad. The GT-R really is a great car, as witnessed by the fact that we rated it higher than the Porsche 911 Turbo. But as BMW is secretly our parent company, they demanded that their M3 win any and all comparisons. As we are contractually obligated to have a BMW win at least four comparisons a year, well, it was your turn.

We did give Nissan the inside back cover and wrote a nice one-year update on the Altima. There are also a couple of complimentary articles about the Infiniti G35xS and the FX50S. Oh and by the way, that FX50S is an impressive ride, but you really need to do something about the silly "bionic cheetah" moniker that you've attached to it.

Anyway, rest assured that we feel very badly about placing the GT-R behind the M3. Even though the M3 is slower in the quarter mile, 0-60 and around a track, the BMW does have a bigger back seat and more usable trunk space. 

Again, please take solace in the fact that your GT-R totally demolished the Porsche 911 Turbo, which is a worthless car. By "worthless" we mean it's an OK enough car, but Porsche doesn't spend enough money advertising in our magazine. When was the last time you saw a two-page ad for a 911 or an inside cover ad for the Boxster? I wish we could stop covering their lame cars altogether, but they've weaseled themselves into an important position in the automotive industry with all of their performance, history and heritage. So try as we might, we can't ignore them. 

Enough about the third-place finisher, the over-powered 911 Turbo. We are here to apologize for that first place finish awarded to the M3.

If we were really honest, the M3 wouldn't have been in the comparison. It's in a totally different class than your GT-R. The thing is, our comparo is the first in a new series with cars competing out of their league. We think our advertisers (that's you!) will love this new marketing plan. It will give prestige to the lower end cars. Next month, a Nissan Rogue will beat the Porsche Cayenne. Just think how Nissan salesmen all over the country will be able to promote the Rogue as the "SUV that beat the Cayenne!"

The month after that, the Nissan Sentra will win against the Lotus Exige. Of course, we need to keep our journalistic integrity. So we'll use the base Exige vs. the Nissan Sentra SE-R Spec V. The little Lotus won't stand a chance. I mean have you seen the back seat in an Exige? No, you haven't, because there isn't one. The trunk? Tiny! Rear doors? Nada! The Nissan Sentra is obviously the superior car. A lot of automotive reporting outlets don't have the courage to compare an Exige to a Sentra, but we think it's time–once again– to put your money where our mouth is.

If you think about it, this will work out better for Nissan in the long run. The GT-R can withstand a second place finish to the benchmark BMW M3. (Sorry, we're contractually obligated to put the word "benchmark" at least once every time we write about BMW, and technically we are writing about them.) Anyway, as the first year supply of your GT-R is sold out, what do you care? It's not as if someone's going to say, I WAS going to buy a Maxima, but now that the GT-R got beat by a Bimmer I'll buy a high-mileage 3-Series.

Bottom line (our first and only concern): we're truly sorry for the second place finish to the M3. We wanted to write it as a tie, but the Germans have no sense of humor. (Just imagine if we'd written "Every other manufacturer should give up on building their own cars and just make GT-Rs instead.")

But we don't want this article to damage our mutually profitable relationship. And if you want to be mad at someone, have you seen what that "The Truth About Cars" web site is saying about the GT-R's record around the ‘ring? The nerve of some people. Adiosu!

Yours sincerely, 

Car and Driver Magazine

[read the Car and Driver comparo here]  

In July's Car and Driver, Csabe Csere takes the Secretary of Transportation to task for her ignorance about auto industry lead times. How can Mary E. Peters' department mandate a big increase in fuel economy standards for 2011 when Detroit’s already signed off on those products? Despite the obvious irony– the buff book’s hobbled by their two-month lead time– Csere makes a good point. The corollary: unless GM planned to switch from gas-guzzling light trucks to fuel-efficient cars in 2003, they’re insert F-bomb here. As May’s sales numbers indicate, indeed they are.

Last month, GM's light truck sales sank 22.1 percent. The GMT900 pickup trucks and SUVs touted as the Next Big Thing are No Big Thing. Chevrolet Tahoe sales are down 39.7 percent; the brand's pickups are off 42 percent. The next Next Big Thing after that, GM's Lambda-platformed crossovers, are also a damp squib. Sales of the GMC Acadia are down 27.6 percent. Saturn dealers sold 38.1 percent fewer of its twin under the skin, the Outlook. Add in ALL GM trucks, and May wiped 36.7 off the comparative sales ledger.

Like Richard Nixon before him, GM CEO Rick Wagoner takes all of the responsibility but none of the blame. At this morning’s shareholder meeting, GM’s 14.4 million dollar man had an opportunity to, as CNN mistakenly predicted, “step up.” Instead of [finally] outlining a specific plan for a return to profitability, Wagoner announced that GM is shuttering four truck plants and ramping-up car production. Why in three year’s time, cars will account for 60 percent of GM's North American production (up from about 50 percent)!

Wagoner’s “plan” to shut off GM’s light truck production spigot in the next three years is too little too late. At the end of April– BEFORE the May sales stats– GM had a 125-day supply of pickup trucks and most SUVs (e.g. Chevy Suburban and Tahoe). The truck glut will continue, and continue to drive down prices. GM’s life-sustaining profits will shrink further and their cash pile will burn even faster. Not to mention the fact that the plant closures could bankrupt struggling suppliers and cripple GM’s already fragile supply chain.  

Meanwhile, Wagoner’s put the HUMMER brand on the auction block. Sure, Hummers sales are in the toilet; down by 60.2 percent this month. But from a wider perspective, the CEO’s increasingly familiar refrain of "all options are on the table” is proof (if proof were needed) that GM’s branding strategy is in tatters. Less than two months ago, the automaker created the HUMMER, Cadillac, Saab” division. Why the quick change of heart? Lest we forget, Hummer is GM’s strongest brand, boasting the company’s highest customer retention stats. At least it DID until Wagoner very publicly clouded HUMMER's future….

Don’t get me wrong. The General Motors Death Watch series started with the premise that GM should be broken-up and sold, with HUMMER as the idea’s poster child. But if radical, fundamental restructuring were the goal, as it bloody well should be, Wagoner should have swung an axe on an entire division, not just Hummer. Saturn was a more logical choice. It's a dead brand walking whose recently refreshed product line did sweet FA for sales (down XXXX). But with or without Hummer, it’s steady as she goes brandwise over at RenCen. Still.

Which means it’s only a matter of time before GM’s lobbyists head over to the White House and Capitol Hill with their billion-dollar begging bowl. Can GM hold out until after the presidential election? Perhaps. But the most amazing part of all this is that Rick Wagoner will probably be at the helm when GM’s slow-motion self-petard hoisting reaches its inevitable dénouement.

Truth be told, Wagoner’s “success” at GM has been the automaker’s greatest failure– at least in the last decade. Yes, it's Wagoner's tenth year at the helm (eighth years as CEO) of what was, before his tenure, the world’s largest automaker. Wagoner’s watched GM’s North American market share slide some ten percentage points. He’s seen the company shed tens of billions of dollars of stockholder value– and lose tens of billions of dollars. He’s sold everything that wasn't nailed down and pissed away the future of millions of American workers; all while lining his pockets and securing a bankruptcy-proof pension.  

When the history of GM is written, Rick Wagoner will be easily identified as the architect of the automaker’s final, sad chapter. Wagoner will be condemned for his lack of vision, leadership and, above all else, timing.

“Rich people don’t care [about high gas prices].” Bob Lutz’ statement– made during the launch of GM’s new SUV’s in August 2005– encapsulates the automaker’s history of arrogance, ignorance and self-delusion. Then again, what else could GM’s Car Czar have said? Whether or not GM should have seen the gas crunch coming, the die was cast. Now, as gas prices crest $4 a gallon, as Delphi and GMAC teeter on the abyss, as GM’s stock price hits a historic low, GM’s slide into Chapter 11 is beginning to assume the mantle of inevitability. And why not? There is no Plan B.

Clearly, GM’s Plan A– make better SUVs and pickups– was a non-starter. Not to belabor the obvious, but soaring gas prices gored GM’s cash cow. Year-to-date, the General’s high-profit SUV and truck sales tumbled 22 percent. In April, GM’s truck sales fell by 27 percent. Sales of the once all-conquering Chevy TrailBlazer fell 73 percent. Despite the Chevy Silverado’s perch on America’s top ten list, despite their new CUVs, the company that made billions on high-profit light trucks is making billions no more.

A new charge of the light truck brigade is not a possibility. Even if U.S. gas prices suddenly descended to $3 a gallon, American consumers will continue to approach gas guzzlers with a ten-foot pole. It would take a good year of relatively low– or at least stable– gas prices to lure buyers back to… no. Actually not. Once backwards, twice shy. And if that doesn’t send the pickup and SUVs genres back to their original, pre-90’s market share, federal regulations and fashion will.

What GM needs right now– and for the foreseeable future– is six brands' worth of class-leading, fuel-efficient automobiles that will, at the very least, stop SUV refugees from jumping ship. That it ain’t got. Not now, and not a year from now.

Meanwhile, American new car sales in general, and The General’s share in specific, continue to crater. Cadillac, Chevrolet, Buick, GMC, Hummer, Pontiac, Saab and Saturn are ALL losing market share in an American new car market that shows no signs of recovery. Inventories are piling-up; every single GM light truck has more than 100 days supply. Despite the obvious light truck glut, GM’s outdated business model is forcing the company to restart truck and SUV production. As it does so, GM’s prospect for its unspecified “turnaround” move from bleak to non-existent.

Contrary to popular belief, foreign profits can’t staunch the arterial spray of red ink; the carmaker’s losses in the North American market are too deep and too broad. GM has assured the markets that it has adequate liquidity to weather the storm. On March 31, GM reported a $24b cash pile. That's $6b less than six months ago. No one knows how much that cash pile lives stateside. And given that GM’s accounts are [officially] unreliable, there’s no exact way of knowing what additional calls will be made on that cash. There will be many…

Delphi’s restructuring plan is, once again, in tatters. Given GM’s ongoing reliance on Delphi for parts, the chances are high that this sinkhole will claim even more of GM’s money. By the same token, an unknown number of GM suppliers have hit/are about to hit/will hit the wall. As the American Axle strike and Plastech bankruptcy prove, GM’s only as strong as its weakest supplier. When Chrysler goes down… It’s only a matter of time before other parts makers suck-up GM’s cash. 

At the same time, GM’s part-owned ResCap mortgage unit needs $600m to stay afloat; co-owner Cerberus won’t be ponying-up the funds. If ResCap files, it could well take all of GMAC down with it. If GMAC files, GM won’t be far behind… The General will open its wallet to stave-off that eventuality.

In the midst of all this, the central question bedeviling RenCen has now become: what can we do to hold out until the U.S. market recovers? The obvious answer: nothing. There is nothing GM can do in the short to medium term to bank enough profits to save itself from Chapter 11. U.S. franchise laws and GM’s depleted financial reserves make it impossible for GM to do what needs doing: jettison excess dealers and dead brands (everything save Chevrolet and Cadillac) to trim itself down to a sustainable, indeed, profitable level.

Surely GM CEO Rick Wagoner knows this. Logic suggests that if Wagoner knew for certain that GM was condemned to file for Chapter 11, he would unfurl his golden parachute and float off to some exotic tax haven, leaving someone else to suffer the final ignominy. And surely presidential candidate Hillary Clinton knows that only a stroke of fate (so to speak) could propel her to the White House.

The truth is that GM’s refusal to admit the possibility of defeat doomed it from the start.

There are two kinds of people: people who split the world into two kinds of people and people who don’t. I usually consider myself part of the latter group. However, after spending a few years with The Truth About Cars, I’ve become fascinated by the variety of opinions from readers who share so much in common. Type in anything to do with the Prius and watch the battle lines form. Last year, The Cambridge Strategy Center published some ideas that go a long way towards explaining why this website isn’t always unified, taken as gospel and/or followed like law. It seems there are two kinds of car people.

The Cambridge Strategy Center is a marketing/brand consultant think tank, serving clients as diverse as Coca Cola, Phillips and BMW (who embraced and set forth the Center’s ideas regarding car consumers).  Inspired by Jungian personality archetypes, the Center believes drivers are either ‘instrumentalists’ or ‘expressives.’

Instrumentalists believe cars should serve a variety of purposes: commuting, schlepping, joy riding, the works. In fact, the closer their car is to a Swiss Army knife, the better. 

Instrumentalists tend to name their cars, overlook windshield wipers that deploy with the high beams and believe that you can coax a car to start with a soothing voice. In general, instrumentalists want their car to be the kind of friend who helps you move on a Saturday, attracts the opposite sex and stays out of a ditch during a snow storm.

Expressives perceive their vehicles as [yet another] expression of their personalities. They are what they drive.

Expressives want a car that shows they are smart, rich, hip, practical and/or environmentally conscious.  Conversely, in a different form of expression, they might not give two puffs what you think.

Expressives like to drive. All driving is a form of competition, whether it’s racing the wannabe in the Honda Civic or owning the world’s most fuel efficient vehicle. The believe an automobile should do one thing and one thing well. Expressives want the best rock climber or dragster or delivery van.

The Caterham is extreme example of an Expressives’ ideal whip. Quick and harsh and so severally pruned for performance that only Jonny Lieberman might like it (and probably not even him). While any niche vehicle will illustrate the Instrumentalists’ desires, a Honda Insight or H1 also serve as excellent examples of their heart’s desire.

Both Instrumentalists and Expressive can care deeply about cars– for vastly different reasons. Their personal rating systems diverge, cross and curve like the streets of Boston. An instrumentalist might consider a Porsche Cayenne sublimely multi-functional; an expressive might contend that the same model is a waste of space and a brand betrayal. 

When it comes to the new car market, Instrumentalists rule. The preponderance of Camcordimas on American highways illustrates the point. By the numbers, these cars are almost identical. They’re also not far from the Malibu, LaCrosse, Galant, Aura and a host of others an Expressive would be too bored to list.

The entire SUV surge can also be explained by the preponderance of Instrumentalists. Sport and utility?  Both traits are severely compromised-– a Ford Explorer can't haul as much as an Econoline or traverse inner Greenland without some serious modification. It can ALMOST do everything, though. And that is the point of an instrumentalist’s instrument. 

For a car to appeal to both camps it must be useful for a number of tasks, and do at least one thing better than everything/anything else. Obviously, there aren't many cars that fall into this category. But any vehicle that does can attain both cult status (Expressives) and popular sales (Instrumentalists).  The Volkswagen Beetle, the early Toyota Corolla, a proper Land Rover, a genuine Jeep and, most recently, the Toyota Prius are the “real” crossovers.

A list like that just begs for debate. It has to, because everyone who comes to this site arrives with a different set of values. My guess is TTAC readers tend to be Expressives, though it’s not a black and white distinction. People are shades of gray. Most of us need to adapt pocket book to lifestyle to desire.  You can’t fit three kids in an Audi TT unless you’re very angry. In a Honda Pilot, the entrance ramp to the I-90 is simply no fun.

This would account for the large number of consumers who own two vastly different cars. RF’s Porsche Boxster S and Honda Odyssey make a strange, but entirely understandable pairing. How many “boring” sedans sit next to a Miata in the garage? Lots.

Personally, I don’t like to force the world into Venn diagrams. I lean different ways at different times. And I now know that many of the disagreements here stem from diverse values, not from the fact that one commentator is smarter than another. Present company excluded, of course.

The fastest way to kill an automotive brand: sell a POS. The bloodletting caused by a brand new clunker can be spectacular. Anyone remember the 1981 Cadillac Fleetwood V-8-6-4? How about the Cimarron? It has taken Caddy more than 20 years to climb back from that double debacle if, indeed, they have. But there’s another, slower and more insidious way to ruin a storied car brand: distraction. When a carmaker builds a vehicle that muddies the marque’s core message, it mortgages its future. To wit, the Lexus LF-A.

Of course, the Porsche Cayenne used to personify the problem– before the sports car maker released its SUV. Once the Cayenne smashed sales records, purists’ caviling quieted. How can you argue with success? Never mind the long-term effects on branding. Never mind that Porsche’s using the money to buy VW. The market has spoken. Which reminds me of the old punch line, “We’re just arguing over price.”

Talk to me in ten years, when the bloom is off the rose. Meanwhile, building a car that’s a genre too far is one thing. Offering a product that completely betrays your brand values is another. I don’t need to resurrect my arguments against the so-not-a-luxury-car Lexus IS-F. Actually, I do. The new LF-A supercar takes the exact same mistake made by the IS-F to the next level, combing brand betrayal with yet another cardinal sin for automotive brand managers: the halo car.

Like anything else, there are halo cars and there are halo cars. There’s the deeply misguided (I don’t have the money to buy a Nissan GT-R so I guess I’ll buy a Maxima instead) and the just plain dumb (who the Hell can afford THAT?). The best way to separate the wheat from the carbon fiber titanium-covered chaff (needed at those speeds): the price difference between the halo car and the next model down. Discounting aesthetic, genre and brand focus differences, the larger the price gap, the more ill-fated the endeavor. 

The Lexus LF-A will sticker for a cool $225k. The next model down, the LS600h hybrid sedan, costs $104,900. The $120,100 price gap elevates the LF-A from desirable range topper to WTFer– and dooms it to failure.

Just ask Daimler, whose slated-for-execution Mercedes McLaren SLR AMG supercar was a major flop at $495k (not including discount). Or Porsche, whose $440k Carrera GT ceased production 230 cars shy of its stated sales target. And these are brands with heritage, whose prestige and racing history makes their stratospherically-priced products inherently collectible.

The counter-argument is entirely emotional. Supposedly, all halo cars cast an unquantifiable glow over the brand’s more prosaic products. The LF-A will drop-kick Lexus’ stodgy image, making all Lexi more appealing. If I was a Lexus stockholder, I’d be uncomfortable with any multi-million dollar investment based on psycho-babble. If I was a brand manager, I’d want statistical proof that Lexus’ image is somehow lacking amongst owners or intenders, and that a supercar would rectify this theoretical problem.

Toyota is a wealthy company. They can afford to make mistakes like the LF-A without losing any metaphorical sleep. But it is a particular KIND of blunder, one that reveals a dangerous new turn in ToMoCo’s corporate attitude.

Speaking of baseless psychological speculation, I believe that building and selling a supercar is a bold statement of corporate health and vitality. Can you imagine Ford releasing its $140k GT now? A halo/supercar says to the world, look at us! THIS is what we can do! (Or never mind the Focus, THIS is what we can do!) But there’s a fine line between being bold and hubris, and hubris and stupidity.

This is why Toyota has cultivated a corporate culture based on paranoia. Fear keeps you focused. You never, ever forget the downsides of any of your potential actions. You always look for the safest option– especially when you’re doing something dangerous. Traditionally, the Toyota Way follows Sun Tzu’s dictate: never to fight a battle unless you know you’re going to win. It’s not for nothing the first Lexus looked like a Mercedes E-Class.

The new Tundra’s sales targets represented a huge miscalculation by the Japanese automaker’s product planners that will cost Toyota billions. And now, the LF-A boldly goes where Toyota has never gone before, both in terms of money and image. Why? For what are they trying to compensate? Lexus would have been far better off transforming their dopey SC into a credible Mercedes SL challenger. Or continuing to refine what they already have. Or just sending their loyal customers a nice “thank you” service voucher. 

I know TTAC’s Best and Brightest welcome automotive excellence in all its forms. But sometimes excellence is boring, and comes from slow, steady progress. It’s a lesson Toyota taught the world. The LF-A is another step towards unlearning it.

Unlike arm wrestling or Martini making, when it comes to currency, there’s an upside to being weak. Especially if you are, say, an American car manufacturer fighting pesky foreigners.  As the value of the dollar falls overseas, the price of American-made cars and trucks falls as well. Theoretically, a lower price should mean increased demand. So, is the declining U.S. dollar the cocktail Detroit needs to lift their spirits? 

Between 2002 and 2007, American auto exports doubled, from about $25b to $50b. Over the same period, imports grew to $150b (they’ve leveled off for the last 18 months). The bad news: exports from General Motors, Ford and Chrysler combined equals a third of the vehicles the US imports. What’s more, roughly half of The Big 2.8’s exports are sent to Mexico and Canada.

The good news: America has stopped demanding that more cars built elsewhere. The rest of the world is slowly opening to the important of American metal.

Russia is a growing market for big SUVs (while America is growing parking lot for same). Sadly, Russian import tariffs make the Berlin Wall look like a welcome mat. In this they are not alone. And over the last few years, U.S. foreign policy has been something less than persuasive when it comes to removing trade barriers. Meanwhile, the Euro market has deflated. And the go-go growth in India and China is slowing.

Even so, both GM and Ford are escalating exports, specifically those aimed at China and Latin America. Chrysler is shifting some of its manufacturing back to the States. It’s a slow process. Chrysler, for example, plans to move more Jeep production stateside as soon as its contract with Austria’s Magna Steyr runs out. In 2009. All three automakers suffer similar hand-tying. And none of this is happening in a vacuum.

While Detroit tries to adapt to changing economic conditions, Aichi and Munich move their pieces around the board as well. Every major auto manufacturer has a facility in the U.S. As the dollar appears to be in the doldrums for the foreseeable future, many are looking to expand or add capacity in the New World. BMW is building the next generation X3 in its Spartanburg plant, right along side the X5. (Magna Steyr will be losing that contract too.) Volkswagen/Audi/Porsche is/are looking to construct a new plant in the U.S., possibly North Carolina.

All of this is good news for the American worker. Mitsubishi not only builds vehicles in American for Americans, they export. The numbers are still paltry– Mitsubishi will export around 12,000 cars this year– but auto exports are trending upwards. Honda, Toyota and Mercedes export from the US. They are adjusting quickly.

Exactly how much a discounted dollar changes price is as murky as any car deal. Carmakers contracted for the steel, copper, plastic and other commodities being formed into a car this morning months or years ago. The parts going into a vehicle come from all over. While the dollar slid 11 percent against the Euro in 2007, the rate is different for other currencies. The dollar has been in a steady decline for six years, so everything is in flux. It is not unreasonable to assume a 10 to 20 percent premium on Japanese and European models. Or the flip side– 10 to 20 percent off American rides.

So the Cobalt should be the new Wii, right? Regardless of how much The Big 2.8 would like to make money in real estate and mortgage derivatives, it all comes back to cars. The bottom line: Detroit did not prepare well for this moment.

Some cars built in America are, in theory, ready for foreign service: Jeeps, Corvettes, Cadillacs, Chrysler minivans. But these are specialty items not found in the bread and butter aisle of the market. They sell in tiny numbers, if at all (Cadillac BLS). Although GM (Chevrolet, Buick) and Ford (Ford) have some brand equity in foreign climes, it’s based on locally/foreign-made products.

It’s hard to think of a single Big 2.8 product that’s ready to be shipped abroad in large numbers. While GM-Ford-Chrysler scramble to adjust their U.S. product mix to reflect high fuel prices, they’re behind the curve, and will be for some time. And despite all this talk of downsizing, American cars are still over-sized for most foreign markets. The constant bloating of transplant product proves that size still matters, and doesn’t translate.

Exports from the States have increased, but it is going to be real tough to make those numbers grow without product the rest of the world wants. Leaving out North America, the Ford F-150 is not the world’s best selling vehicle.  The rest of the globe likes lithe, economical Golf-Corolla-Civics. As Detroit wrestles with another lost opportunity, let me suggest a good, stiff drink.