Calling John McElroy a Detroit cheerleader is like calling Bruce Dern's character in Black Sunday a party pooper. That said, the journalist is not without his fans, nor a platform. Big Mac writes a weekly column for Autoblog, and regularly lobs underhand pitches at Motown royalty on his Autoline Detroit TV program. So why did Detroit Freep Press scribe Mark Phelan devote precious ink to McElroy's fantasy of reviving GM's battery-powered EV-1? I thought GM Car Czar Maximum Bob Lutz put that the idea to bed on June 30, when he called the concept "fucking nuts" [paraphrasing]. "Things have changed," McElroy tells an entirely credulous Phelan. "At $4 a gallon, it's a completely different market. People would beat a path to GM's door." Yes, "The automaker should dust off the blueprints, stick an assembly line in some underutilized assembly plant — no shortage of those — and hire somebody to take orders." Corroboration comes from no less than the director of "Who Killed the Electric Car?" Phelan knocks down the idea– gently. "The Volt will have a small electric generator to recharge its battery if needed, but the underlying technology GM developed for the car also lends itself to all-electric vehicles. Some of those 'EV2s' are already under discussion. As GM contends, the EV1 may not come back, but its children will flourish." Go team go!
Category: Media
As Autoblog (AB) didn't see fit to pick-up the gauntlet thrown down by TTAC on the Top Gear drink driving story, we'll blog one of theirs. And hey, wouldn't you know it? AB finally finds their inner snark and wastes it on an entirely sensible post on Toyota's Open Road blog. ToMoCo offers the above advise, including get on your bike (mate) and skip the drive-thru (unless you have a Toyota hybrid, of course). To which AB scribe Chris Shunk replies: "Automakers understand that the buying public is struggling with high gas prices, and the entire industry is working on new technologies to ease our financial burden. Unfortunately, new fuel efficient products are going to take a while to develop on a large scale, so for now we're just going to have to grin and bear it. That is unless you want to follow the wisdom of Toyota, which has dug deep into its core of corporate genius to give the car-driving public this little tidbit of advice: drive less. Wow, the solution was right under our noses the whole time, and we just didn't figure it out." Silly you.
I would have gone with Major Investor Liquidity Fuck-Up. But I suppose MILF's already taken. Anyway, The Detroit Free Press is waking-up and smelling the coffee, and JPMorgan (the investment bank, not the Gong Show judge) is brewing-up some sobering news. "Analysts at JPMorgan painted a bleak picture for Detroit’s automakers today, suggesting General Motors Corp. might need to raise $10 billion, Ford Motor Co. could be forced to sell Volvo and Chrysler LLC may have few if any options by late next year." Few options as in "The company could face a 'major liquidity event' by the second half of 2009 — and its options for raising capital are limited." Is a MLE the same as Chapter 11? While we await clarification from TTAC's Best and Brightest, I reckon JP's timeline is a bit optimistic. Their overall outlook, however, isn't. "The analysts note that a bankruptcy filing at any major U.S. automaker would be catastrophic for the broader industry, resulting in widely lower vehicle prices and dealing a severe setback to auto parts suppliers." (It's that middle bit that's got Toyota worried.) Oh wait! Maybe not "They sharply widened their loss estimates for both Ford and GM for the next two years, but still expect both companies to return to profitability by 2010." Gotta love that year!
Far be it from me to overuse a metaphor, but you know things are bad for the home team when the head cheerleader starts following the other team's plays. Right in the heart of UAW-land, Detroit News' Auto Editor Manny Lopez [reads TTAC] and mulls over the question of what constitutes an "American" car. His answer will probably piss off the Level Field Institute: as long as it's built in America with American parts, it doesn't really matter where the parent company resides. Waxing philosophical, he asks "what's more American: a Dodge Caravan built in Canada with fewer American parts or a Toyota Sienna chock full of Red, White and Blue components and built in Indiana [Ed. By non-union labor]?" Continuing along the same lines, Manny also wants to know if it's "more important to have the dollars flow back to Detroit, Dearborn or Auburn Hills or to employ American workers?" He'd better be careful or the home team fans may demand he turn in his pom-poms.
It's not even 9am, and it looks like we have a theme for the day: irresponsibility. Reuters reports that "A special edition of the [Top Gear] programme, aired in July last year, featured the show's three presenters in a race to the Magnetic North Pole. Two of them, Jeremy Clarkson and James May, were driving a heavily-modified Toyota [Hilux] pick-up truck and were shown drinking gin and tonics as they did so. It prompted one viewer to complain that the footage was 'grossly irresponsible.'" The show's producers had one word for the allegation: bollocks [paraphrasing]. They claimed they'd filmed the segment in an uninhabitable area of the North Pole. Just in case the Inuit population took offense that that suggestion, the BBC's Bad Boyz pointed out that they were in (on?) international waters "where no drink driving laws existed, and that the presenters were not shown to be drunk or out of control." Not to mention “that at present in the UK, it’s legal to drink a small amount of alcohol and still drive.” So that's alright then. Actually, no. "The BBC Trust upheld the complaint [made in APRIL] saying that drinking while driving "could be seen to glamorise the misuse of alcohol." So.. that's that then. Oh wait; the complainant was also peeved that the programme featured a bit about “parts of the anatomy and injuries to them that could shock." That's a reference to a frostbitten penis to you and me. Over to you Autoblog…
Back in Chrysler's salad days, Dick Dauch was the much-admired head-busting manufacturing boss in an executive suite lined with power players like Lee Iacocca and Bob Lutz. Competing egos served as a check on individual power and privilege. My, how things have changed. Lee's pimping with Snoop, Lutz is nutz (and well-paid for it too) and Alex Taylor III is dissing Dick (in his own special way). Taylor's talking about the American Axle CEO's "less appealing side." In fact, Taylor's "pin the tale of D3 woe on the greedy bastard" profile reveals that American Axle is a public company in name only. Get this: American Axle's corporate address is One Dauch Drive. Son David was recently promoted to President and COO, after other son Richard quit working for dad. And the compensation committee paid Dauch over $18m last year [yes, that's $3.95m more than we thought previously]. Of course, our man Alex can't quite step-away from the pom-poms: "There's no question that Dauch has built a successful company, and he has done good deeds for the city of Detroit by locating his headquarters within city limits. But he has left American Axle grievously unprepared for the market shift away from sport utility vehicles." What about Dick's charitable work? And where was Taylor's self-righteous sarcasm last year, when Dauch pulled down $3.9m plus?
Bengt Halvorson's thesis for Newsweek/MSNBC/Forbes is a predictable, plodding piece of work. The dietribe [sic] makes a stab at exploring the muddy waters surrounding domestic vs. transplant "issue." "For instance, the Chevrolet Equinox, which is assembled in Ontario, has an engine made in China and a transmission from Japan, which brings its domestic content down to 55 percent. The Chrysler PT Cruiser is assembled in Mexico, has a Mexican-made engine and only 37 percent domestic content. Yet the Japanese-branded Toyota Sienna minivan, with a West Virginia-built engine and transmission, and a final assembly in Indiana, boasts 85 percent domestic content." Rather than negotiate a sensible path through this maze– screw it, it's a global economy, buy some Toyota shares, get over it– Halvorson's propagates the propaganda perpetuated by the "Level Field Institute." [This pro-domestic lobby group, run by United Auto Workers retirees, rightly points out that The Big 2.8 account for more U.S. jobs than transplants so that you'll consider rewarding their incompetence by buying a Korean-built Chevrolet Aveo.] Halvorson's "don't buy anything but Motown product" summary [as above] arrives in the third paragraph. His list of acceptable American cars are all made by GM, Ford and Chrysler. Well, it's supposed to. The embedded link to the "10 Most Patriotic Vehicles" takes you straight to the Honda DX Civic Sedan, one of the ten "Least Expensive Vehicles to Own." Funny, that.
Motown's been mauled. Despite it's 72-hour sale, GM's June sales dropped 18.5 percent. Despite its reasonably competitive small cars, Ford sales sank 28 percent. Despite uh, not being bankrupt, Chrysler sales tumbled 36 percent. The morning after Black Hole Tuesday, The Detroit News has dropped columnist Daniel Howes' party line– "Big Three in better shape to survive"– in favor of something more closely resembling reality. Former cheerleaders Christine Tierney, Bryce G. Hoffman, Brian J. O'Connor and Eric Morath have put their collective heads together to pen a partial paean to pessimism: "Slumping sales cloud Big 3's prospects." Yes, "This was supposed to be the year Detroit's automakers started to turn things around… But the industry's 18.3 percent sales decline in June, with steep drops for the Big Three, capped six months of bad news. With little prospect for relief in sight, the future of Detroit's automakers has never been murkier." Murky? C'mon, you can do better (worse?) that that! "Bankruptcy rumors are swirling around Chrysler and GM, while billionaire investor Kirk Kerkorian continues to amass shares of Ford stock. There is talk of reopening the UAW contract, of using profitable overseas operations as collateral for further loans, and of looking to foreign sovereign wealth funds for cash." Strangely, the article makes only a passing mention of new products (and nothing of the Volt, for once); the D2.8 are "rushing the introduction of new, more fuel-efficient models." Well, they did use the "b" word.
Autoblog: "You're going to be reading in the mainstream press about how horrible sales were in the U.S. during June, 2008. Yes, they were bad for many automakers, but consider that there were only 24 selling days last month versus 27 days in June, 2008. This makes comparing raw sales numbers misleading, since there were three fewer days to sell. Thus, as always, all the percentages below represent the change in Daily Sales Rate, i.e. the average number of vehicles sold per day, not the change in raw number of vehicles sold." TTAC joins Automotive News in rejecting this metric. We go by cars sold per month. Period. That said, TTAC got caught-out when Automotive News started with adjusted numbers, then revised to non-adjusted numbers. But no matter how you crunch these stats, they ARE horrible. "Not That Bad Edition"? The idea that any credible news organization would say otherwise is almost as astounding as the chaos afflicting the U.S. new vehicle market. How about this: there are industry players in Detroit who ascribe to Autoblog's Pollyanna philosophy. And while you're thinking about that (or something), Justin and I perform our usual reality check.
This website has railed against automobile manufacturers' insidious influence on editorial content: casual pro-GM remarks made by Rush Limbaugh and Sean Hannity, publications and websites that don't fully reveal sponsored junkets, buff book car reviews that pull their punches to appease advertisers and TV programs built around automotive product placement. [In the latter case, the new Knight Rider is the most egregious example– a program so laced with Ford product placement it was hard to tell where the show started and the commercials began.] Advertising Age reports that the Federal Communications Commission's chairman is sending a torpedo towards the entire product placement business. "There is growing concern that our sponsorship identification rules may fall short of their ultimate goal: to ensure that the public is able to identify both the commercial nature of programming as well as its source," FCC Chairman Kevin J. Martin said. Kev's contemplating new requirements for longer and bigger disclosure of product placement– up to four seconds. Does the ad industry like this? Uh, no. ""I really don't think product placement is sinister or fooling anybody. It's just part of life," insists Dan Jaffe, an exec VP at the Association of National Advertisers. "A crawl or bubble would be totally disruptive of what is going on in the program itself." So much for engaging content, then.
Like many organizations in these gas-conscious times, Kelley Blue Book (KBB) and the LA Times (LAT) are fascinated by the negative effects of high gas prices on consumer spending. So KBB did a study and the LAT reported it. The two giants in intellectual research found that, in short, $4 to $5 gas has forced people to spend less money on other shit [paraphrasing]. For example, people aren't going to the movies as much, now that they are spending more on gas. [Do you know what a movie theater looks like? Click over to the LA Times, and you can not only read "less money on movies" but see a picture of a real line at a real American movie theater.] Other things people aren't buying as much of: expensive coffee, vacations, clothing, restaurants, carwashes, DVDs and high-quality marijuana. OK, I added that last one. But how do we know that the rising costs of other consumables– most notably food– don't account for the cutbacks?
Back in the 70's former TTAC columnist Brock Yates coined the term Grosse Point Myopia: the tendency of Detroit's execs to use each other for their frame of reference. [Our own Andrew Dederer revisited GPM in October 2006.] And now Ford's Presidente de las Americas, Mark Fields, evokes the concept with his insistence that doing better than before is as good as doing well. Or being prepared. But you'd expect these sort of revisionist weasel words in an article by The Detroit News on the D2.8's troubles the day before the June sales numbers drop (as in off a cliff). Did you know that after last May's numbers, Ford and GM "executives were alarmed?" Yes, "eventually [eventually?] they made almost desperate decisions that will cost thousands of jobs, change the vehicles people drive and determine whether their businesses survive." And check this: Mike DiGiovanni, GM's executive director of global market and industry analysis, told scribe Tom Krishner "oil prices in February began to rise, still not to an alarming level because they were consistent with previous seasonal spikes. Gasoline was still at a nationwide average of $3.03 per gallon. In March, though, pickups' share of the market dove to just 11.6 percent and gas rose to $3.24. 'That's when I said 'Red Alert,' Digiovanni remembered. 'We're worried.'" To which Krishner adds "Even critics say it would have been nearly impossible for the automakers to predict the 74-cent-per-gallon spike in regular gas prices between February and May." This is going to be one Hell of a wake-up call. Or, even more worryingly, not.
In today's Wall Street Journal, Joseph White proposes Three Vehicles Detroit Should Build. Y1) a seven-passenger vehicle that gets 30mpg highway, 2) a midsize sedan that gets 40mpg highway that doesn't cost much more than a Malibu or Camry, and 3) a pickup truck large enough to do real work and comes close to 30mpg highway. Worthy goals, indeed. But, Mr. White, may we suggest looking at what the competition already has on the market: 1) no current US market seven passenger gas-powered vehicle gets close to 30mpg highway. [Note: such vehicles exist overseas – assuming you don't look like the humans in WALL-E] 2) The Toyota Prius is the only midsize car that gets 40+ mpg on the highway, never mind that the Cobalt XFE can't hit that number on the side of a barn despite its stick, and 3) if someone builds it (a compact diesel pickup), will they come? What of high diesel prices and competition? And what if ALL of The Big 2.8 builds these self-same vehicles? Anyway, the D2.8 have enough to worry about just trying to survive the next year, much less leapfrogging the competition in the fuel economy department. Of course, there's always the option of installing much smaller engines and asking customers to put up with 0 – 60 times up to 20 seconds, just like in the 1970's.
If a gathering of crows is called a "murder," what do you call ten New York Times Op Ed pieces on high gas prices? A derrick of… no, I won't say it. Luckily, the Times only provides McNuggets for their "Is Your Tank Half Empty or Half Full?" editorial agglomeration. So… Pajama Life: Nicole Belson Goluboff, author of “The Law of Telecommuting,” says telecommuting rocks! Fuel for Inequality: Robert R. Reich says poor people are harder hit by rising gas prices than rich people. What the Green Bubble Will Leave Behind: Daniel Gross looks forward to driving a plug-in electric hybrid charged by a wind mill in his driveway. Ghosts of the Cul de Sac: Allison Arieff says high gas prices will kill the suburbs (so much for Gross' driveway). Goodbye to the Great American Road Trip: Michael Paterniti says fuck that shit. Tax Brakes: tax the Hell out of driving. I mean, the feds should give tax credits for NOT driving. Be the Prius: Tom Vanderbilt recommends hyper-miling. Or is that eco-driving? Psychoanalysis by the Gallon: Viennese scribe Annaliese Rohrer is, gasp!, on the subway "more often than I normally would choose to be." The Light Stuff: Jamie Lincoln Kitman (a car guy!) believes Detroit should be, sorry, build, smaller cars. Hair-Raiser: Karen Karbo loads us with this jewel: "Until [bicycle] helmet hair becomes universally chic, we will never be free of our dependency on mom chauffeuring us to the mall." (Her mom chauffeurs her to the mall?) So, what did we learn?
After thirty-two years in the media, I know how this works. You take a popular, generally negative story like, say, rising gas prices. You think of a likely trend within the story: the effects of $4 a gallon gas on teenage cruising. Must be down, right? Makes sense, yes? So you find people who can validate the central thesis: teens, teens' parents, cops. You weave the tale with plenty of anecdotes and call it good. In fact, there's only one thing missing from this otherwise boilerplate New York Times feature: facts. "From coast to coast, American teenagers appear to be driving less this summer. Police officers who keep watch on weekend cruising zones say fewer youths are spending their time driving around in circles, with more of them hanging out in parking lots, malls or movie theaters." Note the word "appear." And the reliance on an unspecified number of police officers. To be fair– not always a NYT hallmark– The Grey Lady mentions the possibility that the dearth/death of cruising might have something to do with… something else. "To be sure, the number of teenage drivers nationwide was already on a downturn over the past decade, a trend fueled by tighter state laws governing the hours when teenagers can drive, higher insurance costs and a move away from school-sponsored driver’s education programs to more expensive private driving academies." To be sure, we expect better reporting from America's newspaper of record.
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