"We are undoing the mess we had in the 1980s when every brand had everything, they all looked the same and they were all priced the same." So says GM's Product Jeffe Bob Lutz, quoted in The Wall Street Journal. The winner of TTAC's first annual Bob Lutz award went on to say their brands are emerging with their own identity, with "Buick standing for American luxury, Cadillac for total luxury and Pontiac getting back to its quality built roots." So let's run down the GM lineup and see where they stand: Pontiac is selling Cobalts and Holdens. Saturn is selling Opels. Saab is selling TrailBlazers (with the ignition key between the seats). Buick, Saturn, GMC and Chevrolet are all selling the same CUV with overlapping prices. Saturn, Chevy and Pontiac are all selling the same mid-sized car at about the same price. Cadillac is selling squared-off Corvettes and blinged-out Avalanches and Tahoes. Everything GMC sells is duplicated in the Chevy lineup. They're talking about introducing a Chevy-priced "entry level" Cadillac. Yep. Looks to me like GM has a firm grip on their brand identities. Too bad they don't have a firm grip on reality.

Think Maximum Bob has maximum final say at GM? Uh, no. In response to a blogger's question about the lack of paddle shifters on the G8, Lutz responded "The marketing guys didn't want it. Some things we don't necessarily agree with, we have to do." Welcome to WTF country. Marketing input is absolutely critical, but Lutz and GM's golden circle of executives shouldn't be allowing the "marketing guys" to nix anything. Did they have access to a survey showing people were offended by paddle shifters? Did the gear lever manufacturer lobby interject about the threat paddle shifters posed to their business? Otherwise, it's a shock that they are able to give GM's "Car Czar" a headache and even twist his arm into doing anything.

Yesterday, Mexico celebrated the 70th anniversary of the nationalization of the their oil industry, but the 80th year event may be grim. Although Petroleos Mexicanos (Pemex) produced an average of 3.1 million barrels a day of crude oil last year, the Houston Chronicle reports their proven reserves are now only 9.2 years of crude production. At a ceremony in oil-rich Tabasco, President Felipe Calderon called for more private investment, proclaiming the fate of Pemex the defining issue of his generation: "To transform Pemex is to strengthen Mexico." Pemex doesn't have the technological resources to drill into promising, but ultradeep, fields in the northern Gulf of Mexico, close to U.S. and Cuban waters. Mexico needs these fields to replace declines at Cantarell. Jesus Reyes Heroles, CEO of Pemex also spoke, admitting that Mexico's proven hydrocarbon reserves fell 5.1 percent last year. Reyes Heroles said Pemex replaced 50 percent of proven reserves last year, compared with 41 percent in 2006, but was still short of reaching 100 percent replacement. As is everyone.

We stumbled upon GM's NA VP of Design Bryan Nesbitt in a small, windowless room semi-populated by a brown-nose of bloggers (infiltrated by TTAC in search of free food). Justin and I arrived just in time to hear Nesbitt explain why station wagons are cool in Europe: because everything is smaller there and they shop more often and something about old guys not hang-gliding off of Mont Blanc. Anyway, the confab broke-up and I asked Nesbitt what he thought of fake hood scoops. After a moment of PR-related facial rictus, Nesbitt said he didn't personally like them, but you gotta keep the customer satisfied. Hence the new Z28 Camaro will have a massive [functional] hood scoop. Yes, but what of the Pontiac G8 faux intake? Nesbitt said that GM's design studio is at the mercy of its customers, specifically dealers demanding extra bling. For example, Lund Cadillac Hummer Saab (Phoenix) retrofitting the 9-7x with a 3X-sized Saab badge, telling Nesbitt to get with the program (sacrilege!). Nesbitt admitted that a large part of his job is making the best of an ugly situation. "I may not like Hawaiian shirts, but I can make sure it looks as good and fits as well as it can." Let's call it aloha aesthetics.

Forbes reports that the latest showdown pits Porsche against the German state of Lower Saxony, which holds just over 20 percent of VW stock and is determined to maintain VW jobs in Germany. Porsche wants Volkswagen bylaws amended to remove remaining provisions from the "VW Law" which had protected the firm from takeover, but was struck down by a European High Court last year. The move is aimed at breaking Lower Saxony's de facto veto power, by abolishing the 80 percent threshold for important decisions and a 20 percent cap on voting rights. Meanwhile, Lower Saxony argues that the court decision only proscribes the combination of these two measures, and supports a new draft law which would maintain its veto power. Meanwhile, VW CEO Martin Winterkorn has accused Porsche of bringing labor (and by extension, Lower Saxony's) opposition upon itself, telling the Frankfurter Allgemeine Zeitung (via Reuters) that "Porsche scared employees unnecessarily at the beginning. To speak of 'sacred cows' — perhaps that wasn't very clever." How much more collegial can things get?

Ford CEO Alan Mulally told Bloomberg that the Blue Oval is prepared to cut more jobs if their employee buyout package fails to meet its goals. Coming the day after the close of the buyout package, Mulally's comments indicate that the effort was not a stunning success. "We don't have all the data yet," Mulally said of the buyouts. "This is just one step in the process. We have a lot of different mechanisms to right-size the place.'" Mullaly declined to provide further details, preferring that industry watchers simply savor the delicious irony of that classic euphemism "right-sizing." If the buyout package has indeed failed to reach its 8,500 minimum-taker mark, it wasn't for lack of Ford's efforts to convince its employees to run while they can. "The old ways of doing business are gone," wrote manufacturing chief Joe Hinrichs and VP for labor affairs Marty Mulloy in a cheerful op-ed which was distributed to newspapers in Ford factory towns. "We must continue to downsize and simply will not have enough jobs for all of our current hourly workers."

KFOR reports nearly a year and half since the last Trascendavoy rolled off the assembly line, GM is finally unloading selling their Oklahoma City Assembly Plant. In what might be termed a mini government bail-out, Oklahoma County Commissioners are asking voters to approve a $25m bond to purchase the defunct plant. Oklahoma County has talked extensively with Tinker Air Force Base officials in the hopes Tinker will lease the gigantic space to expand the OKC Air Logistic Depot (an aircraft refurbishment center where KC-135 Tankers, B-2 Stealth Bombers, B-1's, and my own E-3 Sentry AWACS are stripped and rebuilt to fly again). Lets hope for my own safety, the Ghosts of GM Past have left the building so Tinker doesn't rebuild my jet to TrailBlazer levels of quality. Oklahoma County residents vote on the bond on May 13th.

As the American Axle strike stretches into its fourth week, GM still maintains it's not affecting them. Not that they'll admit, anyway. With truck sales (real trucks, not them sissified half-breed crossover things) down 20 percent last month, they've weathered the storm pretty well with what they had on hand when the strike started. As the strike progresses and the inventory starts getting picked over, they're going to start feeling some pain as buyers look elsewhere for their $50k crew-cab, long-wheelbase, four-wheel-drive, six liter commuter vehicles. Since The General counts a "sale" when they ship a vehicle to a dealer, this quarter's sales will look really bad (but they'll have the strike to blame it on). Once production resumes and they start stuffing the supply channels again, you can bet GM'll be bragging about their best truck sales in years. But now CNNMoney reports Standard & Poors placed GM's ratings (as well as those of American Axle, Lear and Tenneco) on "creditwatch with negative implications" because they "believe the strike has gone on long enough to possibly begin to affect the financial resources of GM and those suppliers most exposed to the automaker." I wonder how Rick Wagoner will spin that one!

Recordnet.com reports on a new trend: "green" auto shop. To wit: Mark Armstrong's students at Santa Rosa Junior College have upgraded dozens of cars to run on biodiesel. They've converted five cars to run on vegetable oil, modified one to use ethanol and transformed three into electric vehicles. Mike Yonan and his automotive seniors at the Weber Institute of Applied Sciences and Technology modded a fire-engine red 2002 Neon to run on eight lead-acid batteries. Armstrong, who owns a heavy equipment repair business, believes the work teaches his charges self-reliance, resourcefulness and [left coast] Yankee ingenuity. "If we really want alternative fuel vehicles, let's get off the couch and start making them." Yonan says amen to that, and counsels his fellow students to learn the value of simple persistence. "Thinking hurts. Sometimes it gets so frustrating you don't really want to do it. But you think about what it's going to be like and keep going." 

Analyst Todd Sullivan over at seekingalpha reckons it's a good time to invest in the auto sector. Operating under the principle that Americans need cars for their economic survival, Sullivan says motorists will still be in the market– just shopping at a different stores. Sullivan points to Warren Buffet's recently acquired 13.98m share stake in CarMax and Sears Holding's big investment in AutoNation and AutoZone as proof that there's gold in them thar' pre-owned autos and car parts. Sullivan also tempts investors with the fact that all of these companies are "hovering around 52-week lows." Meanwhile, Sullivan counsels investors to avoid Detroit's domestic manufacturers' shares like the proverbial plague. "It should be noted that this is NOT an endorsement of the US auto industry via Ford or GM as these are just terrible businesses due to legacy union costs," Sullivan opines. "They are stuck in a cost structure that dooms them. It is probably the only business the airlines can look at and say "at least we are not them."

Indian automaker Tata has moved one step closer to purchasing Jaguar and Land Rover. Reuters reports that the Indian automaker has secured a $3b one-year bridge loan from Citigroup and JPMorgan. The usual "sources familiar with the deal" say the loan is to "help finance a potential purchase" of the luxury brands from Ford. The principals declined to comment, but media reports from India say Tata is expected to agree to the purchase at the end of the month. (And Francisco Franco is still dead.) Tata may still balk– especially as Standard & Poors is reviewing Tata for a possible downgrade in the light of the potential increase in the company's debt load. If the sale goes through and FoMoCo's cash flow goes critical, Volvo and their 33.9 percent share of Mazda could be next.

Der Spiegel reports that Aston Martin Boss Ulrich Bez met with Daimler's Dr Z last week, and both came away talking relationship. The two met to discuss the possibility of Aston purchasing engines and platforms from the German giant. Bez is just looking for a new technology partner, after the legendary British brand was bought by private investors. But Dr Z thinks love might be in the air, telling Der Spiegel that Aston "fits perfectly with Mercedes-Benz." But a German takeover of yet another British marque looks unlikely, as Aston investors are not ready to take the relationship to that level. After a few intoxicating product cycles with hot-shit AMG engines draped in sensual Aston metal, the attraction may just be too strong for either side to deny. Needless to say, we'll be watching creepily from our little corner of the internet.

After realizing that his announcement that Chrysler would be shutting down for two weeks this July "knocked Eliot Spitzer off CNN," CEO Bob Nardelli thought the news needed some clarification… and a joke. The Free Press reports that some 25 percent of the labor force will be staying at their posts for the first two weeks of July, specifically those with time-sensitive jobs developing new vehicles or working with the company's dealers and customers. Which means that the throngs of customers who will be lining-up around the block for a new Dodge Journey at about the same time gas is expected to hit $4/gal need not be disappointed. Er, at least until they start drowning in the standard-feature inland sea. The branding boffins headed by Peter Arnett should stay busy too, although it's unlikely that even Nardelli knows exactly what he's actually doing. Oh, and Nardelli's moment of levity? "Really, it's taking a bold leap into the 1980s," chortled the Chrysler CEO. So Chrysler really is going bankrupt?

Thinking long-term (as always), Toyota wants its dealers to spend millions expanding showrooms, adding service bays and upgrading their architecture. Thinking short term (as always), Toyota dealers are contemplating the "Image USA II" plan and saying "not on my dime, Bub-san" [paraphrasing]. Automotive News [sub] reports that slumping sales are leading to some serious foot-dragging. "There's never a good time to do a facility modification," TMNA prez Jim Lenz insists. "It doesn't matter if it's two, five or 10 years from now; it will be more expensive than it is today." Toyota's stick: they're threatening not to renew franchises on older stores and offering just two-month franchise extensions to dealers slow to spend the cash. Toyota's carrot: better allocation of popular models. Some dealers say "more cars are the last thing I need." What's more, many just finished investing in Toyota's "Image USA I" plan; they don't relish spending another $1.5m to go to a totally different look. Dealers are telling Toyota: "show me the money." "GM and other brands offer… interest-free financing for their facility program to help you out," a suitably anonymous dealer reports. "But Toyota doesn't."  

Timing is. Everything. ToMoCo spent $1.28b to build a state-of-the-art, full-size, full-size truck plant in Texas– just as the pickup market was starting to tank. The new state-of-the-art factory can crank-out 300k restyled Tundras a year. As production began, the Japanese automaker set a relatively low (for trucks) sales goal of 200k Tundras for the first year. They just fell short, in spite of Detroit-level incentives. Then, with the truck-based SUV market softer than Sponge Bob at bath time, Toyota's launched the redesigned Sequoia. So now Automotive News [sub] reports that they're cutting production of both vehicles. ToMoCo won't reveal the extent of the cutback, but they say they'll throttle back production rather than laying off workers. You have to wonder if and when Toyota may admit defeat, move Tundra production back to Indiana and convert the San Antonio plant to Camry, Corolla or even Prius production. ©2008 ttac.com