Ford’s President of the Americas Mark “MKF” Fields (sorry, the joke is just too funny to let go of) is responding to recent allegations of slipping quality by Consumer Reports and JD Power, by telling Bloomberg that

We’re largely back on track on some of these early issues

He’s referring specifically to issues with the MyFordTouch system that has been the central issue in the recent quality flap, and the fix for that isn’t particularly complicated.

Ford has reworked software on MyFordTouch to prevent random rebooting that had afflicted the system, said Sue Cischke, vice president of environmental and safety engineering. The touch controls also have been recalibrated to respond more quickly to a driver’s touch, she said.

Ford is encouraging dealers to spend as much as 40 minutes training drivers to use the system.

“If you’re trying to figure it out as you’re driving, obviously that’s not a good thing to do,” Cischke said.

Ford’s problem, it turns out, isn’t so much a product quality problem as a customer quality problem… because why would consumers need 40 minutes of training on a system Ford insists they are “demanding” (despite, it must be pointed out, the government’s murmured objections)? Unfortunately for Ford, Michael Karesh argues convincingly that Ford’s quality problems go beyond the MyFordTouch issues… but because its quality was so weak before Mulally took over, at least Ford (and the “PR friendly” auto media) can continue to claim “improvement.”

Didn’t you always have this nagging suspicion that MPG might be influencing the purchasing decision? At least a little bit? A brand-new survey says you are right! Read More >

It’s one thing for a sportscar brand like Lotus to shrug off the self-destructive iconoclasm of its most hard-core “fans,” but it’s quite another thing for its chief executive to take a piss on the entire supercar market while describing the downpour as “authentic, cloud-filtered Alpen raindrops.” To wit, the following bit of nonsense found at Autocar:

The new Lotus Esprit will offer a more “authentic” driving experience than the Ferrari 458 Italia and McLaren MP4-12C, according to CEO Dany Bahar… Bahar claims the Lotus Esprit will “have the character and emotion” that he says the McLaren lacks. He also revealed that the rolling chassis was now complete and fully running prototypes would be ready by November… Formula 1 KERS-style technology is also expected to feature on the Esprit, but Bahar said such electronic systems would be used only where they add to the driving experience and not as driver aids.

If you can make any sense of this blithering nonsense, or how Bahar came to it based on his impressions of a rolling chassis, you must work in marketing. Not that there’s anything wrong with that…

NHTSA Administrator David Strickland warned automakers last week that he had no interest in making it easier to use systems like Twitter and Facebook, indicating that integration of these systems could face future regulation. But while Strickland was playing Bad Cop, his boss (and the traditional bad cop in these routines) Ray LaHood was busy playing Good Cop, telling the AP [via The WaPo] that

We are data-based. Our credibility comes from having good data. If we have good data, then we can make a case. Is messing with your GPS a cognitive distraction? Is changing the channel on the radio a cognitive distraction? We’re looking at that now.

You can see the entire war plan for the DOT’s assault on distraction in PDF here, but don’t rush. You have plenty of time. Voluntary guidelines (yes, voluntary) for visual-manual interfaces won’t come out until Q3 of this year, portable devices in Q3 2013 and voice-activated systems in Q1 2014. Meanwhile, the government won’t even have the data on which to regulate hands-free systems until Q1 2012. So, even though most research shows little change in distraction between a hands-free and handheld device, the industry should be able to sell a grip of hands-free and voice-activated systems before the government is even sure of how distracting they are.

Are Audi’s Mad Men missing Bertel’s services? They must be, as the Detroit Free Press reports that Eminem’s licensing firm has filed a motion in German court seeking to ban this advertisement. Joel Martin, manager of Eight Mile Style, tells the Freep that Audi did not license the Eminem song “Lose Yourself,” adding

It’s stunning. What makes it extraordinary is the similarity to the way Chrysler is using (the song). We saw it and said, “This has got to be a joke.”

At this point Audi’s only statement on the matter comes from its US operations, which simply notes that the A6 Avant will not be marketed here. “This has got to be a joke,” sure seems to sum the situation up…

With new compact and subcompact models from Ford and GM enjoying respectable sales, the mainstream media has been indulging in some “feel-good” headlines, like the New York Times’s Detroit’s Rebound Is Built on Smaller Cars, or CBS’s more equivocal Can small cars rebound U.S. auto industry? It’s an understandable instinct, as the media has long battered Detroit’s inability to build competitive compact and subcompact cars, and in the post-bailout atmosphere of redemption, these headlines definitely help reassure Americans about the value of their “investment.” Unfortunately (if unsurprisingly), however, these pieces gloss over the full truth of the situation. Yes, Ford and GM are enjoying improved sales success with small cars. The “U.S. auto industry,” on the other hand, isn’t actually getting all that much out of the situation, beyond some fluffily positive press. Here’s why:

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When Chrysler celebrated its payback of “every penny that had been loaned less than two years ago” last week, I noted that CEO Sergio Marchionne’s triumphant line was technically correct, but hardly represented the whole truth of the story. I pointed to $1.5b in supplier aid that helped keep Chrysler afloat, as well $1.9b worth of the Bush Administration’s “bridge loan” to “Old Chrysler,” prior to its government-guided bankruptcy and sale to Fiat. Apparently my more-inclusive accounting of the price of Chrysler’s rescue (which was picked up elsewhere in the online media) caused Mr Gualberto Ranieri, Chrysler VP of Communication, to spend some part of his Memorial Day Weekend writing a response of sorts, outlining Chrysler Group LLC’s perspective on the situation. Hit the jump for Ranieri’s statement, and my brief answer to the headline’s question.
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When private, for-profit firms ask for public money, taxpayers tend to take a more personal interest in their goings-on. After all, they are, in a very real sense, still the partial owners of these companies, and they put up the cash to provide a second chance to companies that offer no similar reciprocation when consumers default on their own car loans. And though US taxpayers have earned the right to feel a sense of ownership towards GM and Chrysler, there are several groups of Americans who have shouldered a disproportionate amount of the burden of the bailout. First, the GM and Chrysler employees who were laid off despite the bailout must doubtless wonder why they had to both fund the bailout and lose their jobs (remember, cutting jobs was the most “positive” aspect of the bailout, according to the industry). Similarly, GM and Chrysler’s bondholders paid twice to “save” their failed investments, once with their tax money and again by taking a hefty cramdown. And finally, a third group paid far more than anyone else, not only funding the bailout with with their taxes, but also sacrificing compensation for injuries caused by GM and Chrysler vehicles. The WSJ [sub] reports

Among the creditors who suffered most, car-accident victims represent a distinct mold. Unlike banks and bondholders, this group didn’t choose to extend credit to the auto makers. As consumers, they became creditors only after suffering injuries in vehicles they purchased.

“This was not a normal case. The government was deciding who was going to be taken care of and who was not,” said David Skeel, a University of Pennsylvania law school professor and bankruptcy expert who has testified before Congress on the auto bailouts. Even if the auto makers had legal rights to leave behind product-liability claims, “there is a deep unfairness,” he said. “It would have been easy enough to set something aside for them.”

Given the celebratory, even triumphalist, rhetoric that’s being applied to the auto bailout after the fact, it’s important to remember that many suffered in order to give GM and Chrysler a second chance. Even those who are proud of the bailout’s accomplishment should acknowledge that the jobs saved carried a price that goes beyond any final accounting of anonymous billions lost from the federal budget. The pro-bailout crowd should take more care to recognize and heal the deep wounds that fester beneath their “Mission Accomplished” rhetoric… if only to prevent a repeat of these tragic decisions in the event of future industry rescues.

Surf on over to hyundaiusa.com and ford.com, and the two momentum-blessed automakers will greet you in a remarkably similar fashion: with a lineup of 40 MPG Highway-rated vehicles. Of course, Hyundai would, in its inimitable “asterisk-wrangling” style, point out that Ford’s 40 MPG requires more footnotes than a David Foster Wallace book. But then Ford might shoot back that Hyundai leaves out any reference to City or Highway ratings in its lineup, leaving consumers to play “hunt the legal disclaimer” itself. And as Autoobserver recently noted, highway ratings make for good ad fodder, but combined EPA ratings are much more helpful to consumers.

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Over the course of TTAC’s coverage of US ethanol subsidies, I’ve often wondered why nobody made a political issue out of slaying an ever-growing waste of tax dollars ($6b this year on the “blender’s credit” alone). And with the political rhetoric about America’s debt prices rising, I’ve been wondering with more and more regularity when someone will finally take the ethanol fight to the American people, who are already voting against ethanol with their pocketbooks. But just last December, Al Gore explained why not even he, an environmentalist standard-bearer, could oppose the corn juice he knew was bad policy, saying

It is not a good policy to have these massive subsidies for first generation ethanol. First generation ethanol I think was a mistake. The energy conversion ratios are at best very small… One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers in the state of Iowa because I was about to run for president.

The Iowa primary is a key early contest in the Presidential election, and because Iowans grow and refine a huge amount of corn ethanol, campaigning against ethanol subsidies in Iowa is a non-starter. At least that’s what the conventional wisdom was before today, when, with nearly nine months to go before the primary, the impossible just happened.
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Chrysler’s bailout “thank you” event today was long on praise for the redemptive power of its government bailout and short on talk of remaining challenges, but at least one important fact was acknowledged: this highly-touted “payback” was only for 85% of the money loaned to Chrysler during the bailout period. Although, to be perfectly accurate, it wasn’t exactly Chrysler who acknowledged the outstanding obligation [the firm avoids any such nuance in its release], as CEO Sergio Marchionne simply stated that

We received confirmation this morning at 10.13 am from Citigroup that Chrysler Group repaid, with interest, by wire transfer to the United States Treasury and by bank transfer to the Canadian government, every penny that had been loaned less than two years ago. [Emphasis added]

That last bit was the important part… as in, the part that was most often repeated in Chrysler’s presentation and in subsequent media reports. But it’s not the whole story…

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An executive from American Traffic Solutions, a purveyor of red light cameras, has been suspended after being exposed for posing as an area resident in 43 comments on red light camera-related stories at the Everett Herald. The Herald reported last Friday

Some readers have suggested “W Howard” has been posting comments as part of a marketing campaign run by American Traffic Solutions, Inc. The Scottsdale-based company contracts to provide enforcement camera services in Lynnwood and Seattle. It had inked a similar deal in Mukilteo last year, then [anti-camera activistTim] Eyman pushed for a public vote. Upshot: no cameras in Mukilteo, and a spreading movement around Washington that has growing numbers of people asking questions about enforcement camera technology.

Heraldnet.com requires that people who wish to post comments supply us with a live email address at the time they create their user account. “W Howard” gave an address at American Traffic Solutions. It is one used by Bill Kroske, vice president of business development at ATS. Somebody techie here ran down the internet protocol address that’s being used for “W Howard’s” posts. The electronic trail led straight back to Kroske’s company in Scottsdale.

Kroske pitched Mukilteo on the cameras. He recently was in Bellingham, suggesting a similar arrangement. He’s been the public face of American Traffic Solutions in arranging camera contracts in Washington.

ATS spokesman Charley Territo (whom TTAC readers may remember from his days as spokesman for the Alliance of Auto Manufacturers and TTAC guest editorialist) tells the Spokane Spokesman-Review (where, it turns out, Kroske had left nine pro-camera comments) that his co-worker had expressed his uncontrollable pro-camera passions “the wrong way” by not identifying himself and posing as a local resident. Ya think? [Hit the jump for a full statement from ATS President James Tuton].

Meanwhile, are there any TTAC commenters who have something they need to get off their chests?

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Saab has received wire transfers of around €30m from both Gemini Investments and the Chinese dealer group PangDa, reports Aftonbladet, and it will be using that money to pay off its supplier debts which could use up most of that cash (Saab’s supplier debts are estimated by DI.se at between two hundred and four hundred million kroner, or as much as €44m). Leaving aside the issue of how that money was able to be transferred from China to Sweden in a matter of two days (more on that from Bertel here, the short version: the deal should need Chinese government approval), there are serious questions about Saab’s ability to restart production. After all, the €30m from Gemini is debt, while Saab owes PengDa for an undisclosed number of vehicles that it bought with its investment. Unless those cars are sitting somewhere waiting to be shipped, Saab will have to pay off its suppliers and then build the cars on what is essentially credit from PengDa. Meanwhile, that’s not the only demand on Saab’s finances and attention, as CEO Victor Muller is planning on taking a bonus of over half a million dollars, a decision that is creating fresh problems of its own.

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Pop quiz: when does an eight-month-old story generate a huge amount of interest? When it’s got political overtones, of course. And what better way to milk the last dregs of bailout resentment than by telling a story that seems too bizarre to be true: Cadillac is a “proud” chief sponsor of a Chinese Communist Party-produced film entitled “The Birth of a Party” (or “The Great Achievement of Founding the Party” depending on the quality of your translator). The story started last September, at ChinaAutoWeb.com, and was recently revivified by the Washington Times, Commentary Magazine, and Big Hollywood. Our main interest in the story has to do with its lessons about the rise of China, that country’s tortured relationship with luxury goods, its foreign (from the American perspective) political economy and Cadillac’s continued need for better momentum in China… but clearly others are more interested in it for different reasons.

The political point seems to be that government money is being funneled to the Chinese Communist Party via General Motors, an accusation that, though shocking, doesn’t hold up well to scrutiny. After all, nearly anyone doing business of any kind in China ultimately supports the political and economic structure created by the Chinese Communist Party, legitimizing it and lining its pockets. And surely nobody is suggesting GM abandon China altogether, thus eliminating its greatest opportunity for growth. Meanwhile, as the Freep helpfully points out, Caddy needs all the help it can get in China: without a single vehicle in the luxury car top-ten, Cadillac needs to be aggressive in marketing to China. Still, from a PR perspective, Cadillac clearly has a line to walk here… perhaps it should look for less visible (and risible) ways of building up guanxi (connections) with the powers that be in the world’s largest market for cars.

Now, our strategy continues to be to exit these investments, and just today Chrysler announced that it intends to raise the money it needs to repay the government. Two years ago, no one would have expected us to be in this position today, and it shows the success of the strategy the President implemented and the skill and dedication of Chrysler’s employees. We are looking forward to the full repayment of our loan to the company.

Treasury Secretary Tim Geithner, speaking in Detroit, makes strategic use of the singular tense in order to use the phrase “full repayment” without actually revealing the losses taxpayers have already taken. After all, the $1.9b Debtor-in-Posession loan made to “Old Chrysler” in May 2009 isn’t the loan Geithner is referring to (that one was “extinguished” in liquidation). Nor is the $4b “bridge loan” from January 2009 the loan Geithner is referring to, as a mere $2.1b repayment was counted as “satisfaction in full of the remaining debt obligations associated with the original loan.” Geithner may be “looking forward to full repayment” of the one loan he considers “ours” (as are we), but that’s not the whole story. Once again, a slickly-phrased “payback” claim trumps any sense of responsibility at Treasury to be transparent with taxpayers. And a quick survey of the media indicates that Geithner’s use of the singular has worked quite effectively.