The post-Black Tuesday world is an interesting place for media junkies looking to gauge the U.S. automotive press' level of sycophancy. Yesterday, we reported on Motor Trend's take on May's sales collapse: blame the victim (the American consumer). Or CAFE regs (the feds). Today, we present Warren Brown's analysis. And the first thing the Washington Post car columnist wants you to know: greens can't take credit for the death of the great American gas guzzler. "It is the world Hummer-haters said they wanted. It is the one for which legions of environmentalists and believers in the corrective powers of regulation lobbied. But here's suggesting that they had little to do with the current situation. When it comes to change in a capital-intensive industry such as the car business, money talks, and politics walks." High gas prices did the deed? OK, we'll buy that for a dollar (or four). But we're a little less convinced by Warren's corollary: chill. Brown says the domestics are switching gears to make money in the brave new world of $4+ gas. All will be well. "They [the transplants] have, therefore, a temporary advantage over GM, Ford and Chrysler in the current market shift from trucks to cars. But 'temporary' means just that. Domestic car companies are adjusting to fuel-price-induced changes much more quickly than vehicle sales numbers or media reports indicate." In fact, "The GM-Hummer relationship was never meant to be permanent."
Category: Media
Motor Trend's Angus MacKenzie is pissed-off at the autoblogosphere for crapping on his advertisers' inability to predict the death of the great American gas guzzler. "Don't you love Monday morning quarterbacks? The blogosphere is in seven shades of schadenfreude this week as a shocked Detroit wipes away the blood in the aftermath of May's brutal sales slump: Why didn't Motown see this coming? We told them relying on big trucks and SUVs was a dumb idea. It was obvious gas prices were going to rise. Fire the idiots! Oh yeah? If you're reading this, I'll bet my 401k that like Rick Wagoner and company, four years ago you didn't figure you'd be paying over four bucks for a gallon of gas today. Because if you had, you would now be richer than Croesus, and lying on a tropical island somewhere, kicking back with a mojito or three, without a care in the world. Hey, we're all still writing blogs. We didn't see it coming this fast, either." Ah, this fast. And there's your Detroit excuse of the day, as laid out by GM CEO Rick Wagoner in this startling video. Oh, and this is all your fault. "Automakers grudgingly built the more fuel efficient cars the government ordered them to, but we bought gas-guzzling pickups and SUVs by the millions instead because, hey, gas was cheaper than water. Who needed to drive a girly gas-miser? So maybe we ought to ease up a little on the finger-pointing at Motown; the truth is we're all a little bit complicit here." Speak for yourself Angus. Oh wait…
San Francisco columnist Mark Morford has a round-up of doom and gloom on the energy front. After six paragraphs spent telling us that gas prices are high, staying high and might go higher– with enough links to build a good size fence– Morford finally gets down to the business of entertainment. Here's what the high energy future looks like to a man whose official bio proclaims that he writes about "politics, pop culture, sex, music, design, a wry and punch-drunk universe, vibrators, scotch, media, spirituality and small European cars. And sometimes, genital grooming." Got it? Right… "Carpooling will soar. People will walk, bike, scooter, take the bus, work shorter weeks, stroll and amble and hum a merry tune, reacquaint themselves with the neighborhood, telecommute, vacation locally, have more phone sex. They will shop locally to avoid skyrocketing shipping prices, buy less plastic, recycle. The era of cheap oil that enabled hideous urban sprawl will now quite possibly flip over and begin to enable the exact reverse … whatever that is." That's about it for the good bits. The rest is your boilerplate Big Oil Bush-bashing fear-mongering tripe. Still, was it as good for you as it was for me?
Or, more charitably (if equally egomaniacally), great minds think alike. Or, even less charitably (to both the Freep and TTAC), duh. First, let me get this off my chest. We've done the GM Attention Deficiency Disorder thing here, here, recently here and just about everywhere since ever I started this website. The fact that the Freep's Tom Walsh has only just reached this conclusion- after trying to reconcile J.D. Power's IQS rankings with domestic auto sales– is mind-boggling. As is the format of his treatise: "conversation with self." As are the simple-minded counter-arguments forwarded by his Detroit-loving half. "This [J.D.'s survey results] means that Detroit’s Big Two – General Motors and Ford Motor – are back in the game again. Right up there in quality with Toyota, Honda, Nissan, Hyundai, Audi and all those other foreign brands.” “Who cares?” “Whaddya mean, who cares? I care. We’ve got lots of trouble here in River City with plants closing, suppliers bankrupt, lots of people losing jobs. Better quality means our hometown companies will stop shrinking and start growing again.” Like Walsh's column, this realization is too little, too late. And too optimistic, too soon.
But my God, does Roger Cohen take his time getting to the point. Before the New York Times op ed writer argues for your elected representatives to allow cheap[er] Brazilian ethanol into the U.S., Cohen attempts to entertain us with a discussion of national "re-branding." He begins with the most elliptical lead I've ever read. "Perhaps there’s something to treadmill wisdom. We’re all so narrow-band these days, using the vast resources of broadband to direct ourselves into a chosen news and ideological tunnel. Polarized pluralism defines us." Translation: Cohen was running on a treadmill (geddit?), watching an unknown news channel (broadband) when he fell into a reverie about his Brazilian exile, when the country's economy was almost as hyper-inflated as his prose. And then he thought, wow! "Energy is the country’s new brand." I'm thinking Brazil needs something a bit sexier, but the point– yes! the point!– is corn ethanol bad; sugar cane ethanol, good. "Sugar cane is not a staple. It’s eight times more productive than corn. It grows year round. It must be processed fast, so CO2-spewing transport to distant ethanol plants is impossible (unlike for corn)." The environmental impact of shipping Brazilian ethanol, pathetic workers' wages and the deforestation be damned. See? That wasn't so hard, was it?
I was wrong. In spite of indications to the contrary, the GMC salesman blogger defending your right to suck-up fuel and clog the roadways with oversized trucks didn't have a change of heart about hybrids. In his latest anonymous posting on the Commercial Auto Dealers web site, the same person who warned us about the dangers of hybrids (so quiet we'll all fall asleep behind the wheel) is "irked" about environmentalists who "who think hybrids are God's gift to humankind" because of "Al Gore's half-truths and theories." And he's specifically "annoyed" with those of you who've commented about his views on trucks vs. hybrids. Just to make sure you understand where he's coming from, he states "I'm sticking with my truck and I'm not going to feel guilty about it." Neither should anyone else "feel guilty about going to your local GMC truck dealer and getting the biggest, baddest truck you can find and driving it for no reason at all." Gas prices be damned. After all, "when [hybrid owners] need a tow, the guys with the big trucks are the ones they're going to call first."
It's easy to understand why folks are getting excited about the forthcoming Toyota-Subaru rear wheel-drive (RWD) coupe. But it seems that waiting is driving the autoblogosphere crazy. Take the recent revelation at Autoexpress that Subaru is working on an Impreza Coupe alongside a future Toyota Celica. Autoexpress insists that this Subaru-engineered Imprezica will sport either 180hp and RWD or an STI engine making 300hp and all wheel-drive (AWD). So they must be describing the long-rumored Toyobaru RWD sports coupe, right? The answer seems to be a resounding "maybe." Motor Authority asserts that the Impreza Coupe is "not basis of the new RWD sports car to be sold by both companies." That RWD sports car will have a 220hp base model with RWD and a 300hp AWD flagship model. So are these the same car or what? For what it's worth, Motor Authority also has spy photos of what they say is a prototype of the (non-Impreza) "RWD sports car." Take a gander for yourself, but it looks pretty Impreza-like to this blogger. Can Subaru really sell a RWD version of the eternally AWD Impreza? Will the RWD base version and AWD flagship carry different names? Can the internet be whipped into any more of a fanboy frenzy over this car? So many questions…
This is just prurient, base, vulgar car lust in action. I have no cutting analysis to offer you, no insightful realizations, not even a regurgitated press release from a manufacturer intent on wowing you with numbers. Nope, it's just the sounds of Ferrari's new California model. OK, a couple of stats. The engine giving pistonheads eargasms is a fresh 4.3-liter V8 with direct injection, making 460 horsepower, routed to a seven-speed dual clutch transaxle. I think the Ferrari California is a good looking model but it's not breathtaking, and the folding hardtop is the kind of embarrassing mainstream compromise that should be outside of Ferrari's brand profile. Nevertheless, it's coming. (Make your own damn pun.)
AutoExpress offers a "review" (in the Motor trend sense of the word) of the European Focus, complete with Ford's new dual clutch gearbox. Parsing AutoExpress' usual PR puffery, it's not sounding amazing. Whereas VW's DSG is a viable alternative to a manual transmission– it accelerates faster than rowing your own and returns even better mileage than the stick– Ford's sounds little better than a bog standard autobox. AutoExpress says "But there are no steering wheel-mounted paddleshifters with which to change up or down – and no Sport mode on the box, either – as Ford is keen to stress the gains in economy and emissions offered by Powershift, rather than its outright sportiness." Right, so that puts the "stick replacement" theory to bed. It's just a better automatic transmission. AutoExpress also notes that the Powershift's a very expensive option only available on higher end cars (this is what VW does, too, but not as badly). The rumor is that PowerShift is coming to the US (would be great paired with EcoBoost). Let's hope FoMoCo's boffins reprogram it not to suck.
AutoWeek's Dutch Mandel thinks GM has got it sussed. The mag's Editor & Associate Publisher is full of praise for The General's decision to shut down truck plants, kill Hummer and ramp-up car production. Mandel calls the plan "a brilliant tactical move." That's because it "telegraphs a message that this company understands life as we have known it has changed." (What was their first clue?) Dutch then pooh-poohs the notion that consumers should change/are changing their driving habits. It's better for a "big-time corporate CEO to be proactive and go with the flow of consumer sentiment." He's obviously confused about the difference between being proactive (which implies anticipating a problem and taking steps to avoid it) and a knee-jerk reaction in response to a sudden "oh shit!" realization that you'd better do something fast because you're going down the toilet. Nevertheless, Mandel "applaud[s] all who put collective heads together to make this tough decision– Rick Wagoner, Fritz Henderson, Bob Lutz, all the way down the line." How come GM doesn't list its advertising budget as a PR expense?
I haven't had an email from my favorite ascot-wearing automotive journalist in quite some time. Yesterday, I held off pinging Jerry– i.e. blogging his Forbes' rant "What Auto Recession?" In this well-timed work, the automotive essayist argued that healthy sales abroad are a suitable salve for domestic doyennes depressed by Black Tuesday. I let it be, because it's so not true. On any level. Today, Mr. Flint has a prescription for Detroit. "Time for Plan B" reads a bit like Plan 9 From Outer Space. Step 1: luxury cars. "Instead of milking big SUVs for profits, Detroit needs to build more cars rich folks will pay big money to own." Step 2: export. "The U.S. is turning into a lower-cost production base… If Detroit can build a serious export business, it will expand the variety of cars it can profitably build." Step 3: build $30k economy cars. "Look at the Prius hybrid-electric vehicle: Without the fancy powertrain, it’s a $16,000 Toyota. Yet buyers wait in line to pay $26,000 for it." As I pointed out in yesterday's GM Death Watch, it's at least three years too late for Detroit to do anything but suffer. Still, it's nice to know our man Flint's thinking outside reality the box.
And so they did. GM's stock price rose today, after scribe Vito Racanelli penned an opus entitled "Buy GM." "On the long side, General Motors now seems suited mainly for one group — bold investors who hope to eventually double their money but can afford to lose it all if their wager goes awry. The good news for GM fans: Despite the misery that the car maker is experiencing and might endure for another 12 to 18 months, such a wager ultimately should pay off." Racanelli then presents a litany of GM's financial "challenges," combined with a regurgitation of GM's party line (i.e. things suck now, but won't later). Racanelli's not-quite-as-guarded-as-it-seems recantation of The General's Volt hype exemplifies the analysis. "But if the Volt succeeds — and, yes, Wagoner's stated delivery deadline won't be easy to meet — GM will steal a march on its big Japanese competitor. And, says Elizabeth Lowery, GM's vice president of environment, energy and safety policy: 'The Volt is just a piece of it.' She says that the company is launching eight hybrids this year — more than any other company — and 16 over the next four years." Sixteen? "'Enormous' is the word that Csaba Csere, editor-in-chief of Car and Driver magazine, uses to describe GM's progress. 'Their cars look good on the outside, have a luxurious sense inside and drive well,' says Csere, whose publication used to routinely blast the General's vehicles." Etc. Look for the "Racanelli" effect to disappear when GM's May sales are revealed tomorrow– with or without Rick Wagoner's new new turnaround plan.
The internets are abuzz with the "revelation" that Chrysler-owner Cerberus has sold off more than half of its investment in the ailing American automaker and lender GMAC to about 90 other investors. The only problem with this story: timing. As Reuters puts it (and The Detroit Free Press neglects to mention) "The timing of those transactions was not clear." IIn other words, it's a non-story. But not completely. For one thing, Cerberus' limited exposure to the two companies makes it easier for them to bail; it explains Cerberus' stated decision not to top-up GMAC with the $600m it needs to stave-off bankruptcy. Second, the story's original source, The Financial Times, paints an unintentionally humorous portrait of unbridled greed. "Most of those joining the GMAC deal in 2006 did not have much time to do their due diligence. Instead, Cerberus invited about 50 hedge funds to its Park Avenue office for a presentation by its chief administrative officer, Seth Plattus. 'It was a 'trust me' kind of trade,' says one investor, who bought a small piece of GMAC. 'You had no time to do real due diligence. But it was a hot deal and everybody wanted in as part of the gang.' Many of the people who took part in the deal were friends of Steve Feinberg, founder of Cerberus, and said they invested as a sign of faith in him… 'There was an element of the greater fool theory to it.'"
UPDATE [via Automotive News] "Cerberus has not sold any equity in Chrysler," said the Chrysler official speaking on condition of anonymity. "There are always co-investors at the time of the transactions so when they originally purchased 80.1 percent of Chrysler, there were co-investors at that time. They still own 80.1 percent."
Observers of Consumer Reports' "security through obscurity" 100-point grading system got a peek under the kimono with the arrival of the July 2008 issue. The Hyundai Elantra SE got a class-leading 82 rating, up from the Elantra GLS's 70. How so, without a full model changeover, one asks? Simple, says CR: well-tuned ESC and wider tires = better handling & braking. The re-do represents chump change– compared to going back to the drawing board. The small effort got the Hyundai some free publicity by becoming CR's Top Pick. Other recipients of tuning & suspension finesse: the Toyota Prius Touring (up 14 points to 82 from the base model). The Chevy Malibu LTZ V6 got a rethink, rising 13 points, beating-out the Saturn Aura XR andearning itself a place as a middling contender into a near-class leader. The upgrade's not enough to help the bottom-barrel Chevy Aveo/Pontiac G3 and Toyota Yaris, all stuck at 36. But for most other carmakers, there appears to be a not-so-difficult way to goose those ratings. Now, automakers, get to it, before CR changes their secret formula!
The DAY AFTER a team of Honda-promoting skydivers performed a formation for a live UK TV advertisement, the plane used for the stunt has crashed. The accident killed the pilot and a skydiver. According to The Daily Telegraph, a total of ten skydivers attempted to exit the stricken plane as "one of the aircraft's wings snapped off and it plunged to the ground, where it burst into flames." The paper also reports that "Honda and Channel 4 said they did not believe any of the skydivers involved in the accident had taken part in the filming of the advert." Clearly, our warning that the stunt could prove a human and PR catastrophe had a firm basis in reality. Whether or not the tragedy will prevent future live stunts remains to be seen.
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