Forbes reports GM is creating a China Science Lab at its Shanghai manufacturing facilities where development work will take place on advanced vehicle technologies. GM won’t disclose the extent of its investment in the lab, but has said it will hire 100 employees from China and abroad to form the initial staff. John Du, the former manager of Intel’s China Research Center, will supervise work at the new lab, which will focus on “advanced engine technology, battery cells, safety research, driverless vehicles and light materials.” Which begs the question, has anyone told the Michigan Economic Development Corporation about this? Seriously, this seems like exactly the kind of high tech, green-jobs opportunity that Michigan’s politicians are constantly giving GM massive tax breaks for. Not to mention the raft of federal incentives, bailouts and green car-development initiatives. But, as GM’s Alan Taub puts it, “China has begun emerging as a world class research hub for automotive technology.” That and China has begun emerging as the only thing keeping GM going. Er, except for our federal incentives, bailouts and green car-development initiatives.
The Virginia Supreme Court on Friday ruled that police may not search vehicle passengers without a specific reason to believe that they may have committed a crime. The case began on April 19, 2006 when Suffolk police officers pulled over a car with four people on board at around 3pm. Once stopped on the side of the road, Officer J.B. Carr used his drug-sniffing dog, Xanto, to check the vehicle in question. Xanto “alerted by sitting and waiting for his reward” on the rear passenger’s side. Officer Jay Quigley ordered the vehicle’s occupants out so that the car could be thoroughly searched. Nothing was found. The police officers then proceeded to search the driver and two of the passengers. Nothing was found. Finally, passenger Travis Stacey Whitehead was searched and officers discovered two syringes and a bottle cap later identified as containing heroin residue. Whitehead was convicted of drug possession and sentenced to serve twenty-two months in jail.
Back in February, a tipster told us that pre-C11 GM was cutting white collar pay. And so it did. Thousands of non-union GM workers—both here and abroad—took a three to seven percent hit for the team. Executives salaries received a 10 percent haircut. The move saved the on-the-cusp of nationalization automaker a reported $50 million. That’s not much compared to, say, the $100 billion in taxpayer funding and subsidies and whatnot that GM’s received since. But at least the move signaled the beginning of a new era of accountability at GM. Just kidding. In any case, we now read that GM workers’ in-boxes received a notification from HR that New GM is restoring previous pay levels.
If there’s a better symbol of OEM brain drain than Mike Donoughe, I’m not aware of it (but let me know in the comments). Eighteen months ago he was Chrysler’s “star engineer” tasked with leading development of much-needed Sebring/Avenger replacements. He left ChryCo in what appeared to be a clash with senior management, and we’re still waiting for new models to take the place of the gruesome twosome. His next stop was Tesla where he became the head of manufacturing and engineering in July 2008. Within months Donoughe had survived a vicious purge (by txt!), and probably began planning his exit. Having announced his plans to leave Tesla for product development firm St. Clair Consortium, Donoughe is leaving another OEM just as they appear to need him most.
Stop me and if you’ve already addressed this: but I can’t find it on TTAC. Could you describe to the pros of spending the extra coin for aftermarket coilovers rather than just buying stiffer springs?
One of our sources e-mailed me a copy of GM’s pre-bankruptcy dealer strategy, including the formula deciding which dealers lived and which ones died. [Download PDF here] According to the doc, the proto-nationalized automaker pegged its ‘ideal’ dealer total at 3,380. Only, Fritz Henderson’s mob overshot their target by 220: “objective performance criteria yielded approximately 4,100 dealers vs. 3,380.” Flash forward to today, and Automotive News [sub] reports, “The House’s No. 2 Democrat said lawmakers may try to revive stalled legislation to reverse dealer terminations if General Motors Co., Chrysler Group and dealer groups don’t sit down soon to begin negotiating a settlement.” Hang on; where’s the Presidential Task Force on Automobiles in all this? Meanwhile, Senator Grassley said “it’s important for Congress to get an explanation from the manufacturers as to how they determined which dealers would be terminated and which would be retained.” Well, now you know.
Let’s imagine that Bob Lutz has quit his job (“New GM? It’s a crock of shit!”) and you applied for the job and got it. What would you do? How would you change “New GM’s” marketing? Would you change some of GM’s brands’ slogans (“The New Class in World Class”)? Would you redefine some of the brands? Maybe you know a better spokesman than Ed Whitacre? Maybe a new brand is the order of the day? Bob Lutz does come in for a lot of stick, but could you do any better? Please help “New GM”, you’re their only hope . . .
Double your pleasure, double your fun…Curbside Classics is turning into a twice-a-week obsession. Are you going to have the time? How about the make and year of this car?
I think the competitors like BMW have spent a fortune to pick up the market share they picked up (through leasing). … We’re not going to go in and offer giveaway leases with a premium brand.
Cadillac sales boss Ed Peper in a Wall Street Journal piece detailing Cadillac’s inability to sell (and now, lease) its vehicles. “Our business used to be about 65% leasing,” one Cadillac dealer explains. “We’re currently running at about 5% lease [and] we are continuing to lose people who we used to be able to go from one Cadillac lease to the next.” Despite the Beemer-bashing, Peper says Cadillac is looking at increasing lease percentages by “getting more aggressive with leasing each month.” After all, it’s not that Cadillac doesn’t want to lease. The problem is that GM doesn’t have a captive lender anymore who is willing to subsidize the leases that Cadillac’s business depends on.
The Michigan Economic Development Corporation has announced a ten-year, $20.6m tax break package that will keep the headquarters of Hummer in Detroit after the brand is sold to Chinese firm Sichuan Tenzhong. The Detroit News reports that Hummer will employ 100 workers at its headquarters post-sale, and plans to invest $9.4m over the next five years and hire an additional 200 employees. Negotiations between GM and Sichuan Tenzhong are ongoing. In other Hummer news, a study in the Journal of Consumer Research [via Science Daily] seeks to understand the mentality of the now-rare Hummer driver. And it turns out that, at least in the minds of Hummer drivers, giant SUVs are patriotic.
The House has authorized a new package of industry aid in the form of research and development funds for advanced technology vehicles. H.R. 3246 still needs to be funded, but authorization is for up to $2.9b over the next five years. The AP reports that the bill would fund research on “technologies such as batteries for hybrid vehicles, electric cars, hydrogen fuel cells and infrastructure for the electric grid.” Notice something strange there? President Obama had previously moved to cut funding of hydrogen research, a move that DOE spokesfolks at the time explained by gently reminding that “the probability of deploying hydrogen fuel-cell vehicles in the next 10 to 20 years is low.”
A recent news report in Baton Rouge, Louisiana, gives yet another example of a red light camera ticketing an innocent driver and then leaving it up to the accused motorist to prove the ticket was undeserved. Here’s a quick overview of what happened: Troy Carter, a driver with a Louisiana license plate, received a red light camera ticket in the mail from the city of Baton Rouge. The photo showed a Blue Mercury vehicle, which was completely different from the vehicle he owned—a white GMC Yukon XL. However, both his vehicle and the Mercury shared the same license plate number. The key was that Carter’s vehicle is registered in Louisiana with Louisiana plates while the Blue Mercury is registered in Texas and has a Texas license plate. The ticket should have gone to the owner of the Blue Mercury but instead Troy Carter ended up with completely undeserved ticket out of the blue.
Economics professors Burton Abrams and George Parsons sum up the Cash for Clunkers tragedy wonderfully in their essay Is CARS a Clunker? [PDF available here]. “Concentrated benefits create vocal advocates, while diffused costs produce silent, apathetic opponents,” they conclude after showing that the costs of crushing clunkers outweighed the benefits by about $2,000 per vehicle. But reality is even worse. As economists, Abrams and Parsons break everything into dollars and cents. That’s their job. But one look at the CARS.gov list [PDF] of vehicles “traded in” shows that, for car aficionados anyway, the true cost of Cash for Clunkers is almost impossible to boil down to mere money. Did you know some fool “traded in” an Aston DB7 Volante? An M3? A TVR? A grip of Ur-Quattros? Three Laforzas? I didn’t even know what a Laforza is. Now I don’t want to get all Hemmings on you, but this stuff is more than just heritage: these vehicles are wonderfully bad decisions waiting to happen. Literally thousands of young men are currently trolling their local Craigslist for out-of-reach vehicles at prices that would make anyone who knew better run away screaming. Thanks to Cash for Clunkers they’ll never understand the agony and the ecstasy of trying to keep an Aston running on elbow grease, generic parts and a Nietzschian will to awesome. And that’s the real tragedy.
The Governor’s Highway Safety Association has just released a report entitled “Closing the Circle” [download pdf here]. The “study,” funded entirely by State Farm Insurance, is all about the ethnic outreach, baby. Why? Because non-whites need more highway safety more than whites, apparently.
Motor vehicle crashes are a public health threat for all Americans. However, the threat is more pronounced among multicultural groups who are disproportionately killed in traffic crashes. A recent report from the National Highway Traffic Safety Administration (NHTSA) showed that 6.8 percent of Native American deaths, from all causes, were attributable to motor vehicle traffic crashes, and more than 4.7 percent for Hispanics or Latinos. For the non-Hispanic White population, the percentage of those dying from traffic crashes was just below 1.6 percent, and for African Americans and Asians and Pacific Islanders, the percentages were 1.8 percent and 2.5 percent, respectively.
Why would anyone want to go there? But go there they did . . .
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