After swimmer Michael Phelps won a drawer full of Olympic gold, he signed a deal with Kellogg’s to promote Frosted Flakes. Stupid move. Tens of millions of parents know that Frosted Flakes make their kids bounce off the friggin’ walls. Part of this healthy breakfast, my ass. All Phelps had to do was align himself with brands selling healthy living and he could have smoked the finest Maui Wowee, in Maui, for the rest of his life. Anyway, Phelps got caught doing bong hits. A smart handler would have used the opportunity to strengthen the Phelps brand. “Michael is obsessed with fitness. He doesn’t drink alcohol or smoke cigarettes. He regrets using an illegal herbal drug for relaxation. He is now exploring yoga and other alternatives. He encourages his millions of fans to learn from his mistake, as he has.” Let the Mary Jane debate begin! Anyway, Phelps signed a million dollar deal with Mazda to promote the brand in China. (Huh?) When the swimmer got busted, they somehow convinced him to make this entirely bogus, po-faced apology. It manages to make both Phelps AND Mazda look stupid. Yes?
Category: News Blog
That’s TTAC Ken Elias earlier today in Bailout Watch 394. And lo, it did come to pass. Just hours later, Automotive News reported: “General Motors is expected to identify more than $1 billion in savings from additional plant closings and factory work-rule changes when it files a viability plan with the US Treasury on Tuesday, said a source familiar with ongoing stakeholder negotiations.” And no, it wasn’t Ken. Of course, Elias goes on to say big whoop. “[It’s] not enough to right a ship that’s losing $2B+ a month in cash flow.” Somehow that perspective didn’t make it into the AN piece. Still, the article’s well worth a read—if only for a laugh. Ladies and gentlemen, we have a new (yet old) straw man to set alight: True North.
Holy Mother of Malaise! As the bad news keeps coming for Detroit, the reactions are becoming increasingly agressive. And now word comes from the Detroit News that US automakers are “taking a cue from their Japanese competition” by reducing the number of trim options on their vehicles. “The industry has way too many brands, too many models, too much choice, to be efficient,” Mike Maroone, president and COO of AutoNation, tells the DetN. The import approach of limiting options to trim levels “may not serve every niche but it’s a much more efficient business model.” But despite Detroit’s apparent acceptance that less complexity is a good thing, they still lag behind. Sure, Ford has cut the number of available configurations for the new Fusion from 2,600 in 2008 to 104 in 2009. But GM has only “streamlined” its Malibu and Cobalt to four main trim levels, while Chrysler can brag only of trying to cut its Sebring configurations down to 1,000 versions. On the engine simplification front, Ford is out ahead of its Detroit rivals as well.
My almost-three-years-old Acura TSX has been developing an annoying cosmetic problem: the plastic bumpers and sill trims have slowly but surely been turning a different color from the rest of the car. We live in a mild climate and I work from home, so the vast majority of the time that car sits protected in a garage out of the way of the sun’s UV rays. Even so, the sheet metal is still blue-silver while the plastic bits are turning a pale green. Argh, I know that over time it is just going to keep getting worse, and my warranty is almost up (45k miles down out of 48k).
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No prizes for guessing “not so much.” But with its product line dead in the water, Chrysler desperately needs to generate some kind of enthusiasm for its continued existence. And at this point, the promise of what Auto Motor und Sport call “retro-flitzers” like the Fiat 500 and 500 C shown above is the only shot they have. And sure enough, Automotive News [sub] reports that Fiat may export European-built cars in order to speed up the timeline for integration with Chrysler. “We are currently working on a plan to begin shipping the Fiat 500 minicar and the Alfa Romeo 940 [entry-premium car] to the U.S. in about a year,” says the anonymous source. who These cars would be sold at “some” Chrysler-Dodge-Jeep dealers in advance of production of the 500 at Toluca, Mexico and the 940 at an undisclosed American plant. Which means taxpayers will be funding a premium captive-import-led “turnaround.” Oh boy. Meanwhile, Fiat is considering building its production purgatory-bound 169 upper-premium sedan on Chrysler’s LX platform. I can see the “Italian Engineering” ads now.
Pity the print journalists. You work hard to live up to stringent standards of journalistic ethics, collect quotes, confirm sources and generally bust your hump only to have some snotnose with a laptop beat you to the punch. Ken Bensinger of the LA Times knows what I’m talking about. He has a piece today that compares the Chevy Malibu with the Chevy Impala, a contrast he spins into a number of critiques of GM’s product overlap, cannibalism and image-weakening products. Sound familiar? I thought so. As tempting as it might be to blame the family bankruptcy for falling standards, or guffaw at the very notion of a newspaper criticizing an automaker’s business decisions, this isn’t Newspaper Deathwatch. On to the cars.
The latest TTAC Bailout Scorecard (PDF) is now available. Updates this week include:
• The US makes sales and excise taxes on new vehicles deductible on federal income taxes
• Chinese market sales were up 4.4% in January at least in part due to government incentives.
• German clunker culling incentives spur huge up-tick in smaller car sales.
• Spain unveils new €4.1B aid and incentive package.
The Automotive Lease Guide is slashing projected residuals for 2009 GM and Chrysler vehicles, reports Automotive News [sub]. ALG says that their new 36-month projections reflect the brands’ “uncertainty,” heralding the arrival of yet another dire consequence of bankruptcy that the bailout was supposed to prevent. Oh well, what’s a few billion among friends? Now let’s take a look at the nitty-gritty.
One of our Best and Brightest wrote an insightful comment on how NOT to buy a car in another thread. I asked flashpoint to expand on his advice for your edification.
If you purchase a car using your Home Equity Line of Credit (HELOC), it only makes sense to do so if:
#1 you are in excellent financial standing with excellent credit standing;
#2 you have a steady occupation with little risk of being laid off; and
#3 the entirety of the car price can be paid off with the HELOC.
Autocar reports that GM will import 100 left hand drive Camaros to the UK. All UK Camaros will come with GM’s 500bhp 422bhp 6.2 liter V8 and will list at 35k pounds sterling ($50k). But will anyone short of the Hamster (get it? He’s short!) actually buy one?
Barack Obama’s plan to appoint a “car czar” to oversee the auto industry bailout has been shelved, reports the New York Times. Rather than appoint a single individual (presumably of Romanov extraction) to administer the government handout, the President has ordered Treasury Secretary Timothy Geithner and chairman of the National Economic Council, Lawrence Summers, to lead a “Presidential Panel on the Auto Industry.” Or Presidential Auto Task Force. Or Presidential Task Force on Autos. Or something. Either way, it’s time to start spreading the inevitable blame around. After all, GM’s top dogs have evaded responsibility for decades of disaster by embracing complexity. And it’s just so much harder to burn a committee in effigy.
Now that GM’s Car Czar is slinking off into the sunset before his bankruptcy-proof pension becomes a bone of contention (“I’ll have to check with my accountant about that”), the man of Maximum is shooting off his mouth in the great Lutzian style. “My personal favorite would be to see Saturn survive and prosper,” GM’s vice chairman told Automotive News [sub], “But frankly, the reality is that that is probably not going to be the outcome.” Does this sound a bit like finding out you were dumped via a batch e-mail? AN somehow managed to find a doomed Saturn dealer (as they all are, now) who didn’t use expletives when hearing of the multimillion-dollars-per-year executive’s casual execution of the Rethink brand. “That really seals our fate,” said Lasser, owner of Saturn of Denville, Saturn of Mount Olive and Saturn of Livingston. “I think they knew this fact months ago, and they never shared it with us.” So who killed the non-electrifying cars?
Word and music by John Rich. (Lyrics after the jump) The same singer-songwriter who delighted crowds with the deliciously, unintentionally ironic Raisin’ McCain. You know, for background.
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