When I heard Sean Hannity blather on about “the death of journalism” re: the mainstream media’s coverage of the current presidential election, I paid the conservative talkmeister scant attention. Even if the press is in the tank for Obama, it’s not like the situation is analogous to living in Mother Russia during Pravda’s Stalinist heyday, when the KGB had about as much tolerance for dissent as Saddam Hussein’s thugs. Check it: Hannity’s got his airwaves. The “liberal press” have theirs. And everybody and their mother has the internet. But now that I’ve been following the GM – Chrysler merger story, I beginning to wonder if Mr. U.R. A Great American may have a point. I, for one, am not fooled for an instant by the automotive press’ unrelenting reliance on “unnamed sources” for their reporting on the creation of American Leyland. GM PR is spoon-feeding the press, no one’s admitting it and that’s that. But Jesus, did Reuters stop to think for ONE SECOND that GM might NOT have contacted Toyota for help? If we can see that a source isn’t reputable from friggin’ Rhode Island, WTH is wrong with Reuters’ Asian reporters? And what kind of bullshit is it when a supposedly reputable news agency retracts its story by repeating it? Media pros bemoan the ethics and standards of internet-based “citizen journalists.” Puh-lease.

When I set out on a comparison test like this, I have one main question in mind: if I were in the market to buy a new car for my family, which one of the cars tested would I buy? I love supple leather seats, premium sound systems, grippy wide tires and an engine with the torque of a diesel freight train. But the reality at this time is that my employer, one of the world’s largest financial institutions, has lost billions of dollars in recent quarters. Its epic balance sheet can now be described as fragile. As a financial controller, I see first-hand how budgets are being drawn in asphyxiatingly tight. I know that I’m not alone in feeling nervous about my future in this economy. So which of these family sedans would I buy? The Mazda Mazda6 i Sport.

In a break with TTAC tradition, today’s WAR comes from an “authoritative” source: Reuters. OK, it’s Kyodo news via Reuters. (Free marketeer that I am, I’m not so sure I trust a “nonprofit cooperative news agency.”) “The Kyodo news report said Toyota was expected to consider quick fixes for the cash-strapped GM, including buying up its assets and helping it secure sufficient business funds. The executives of the world’s two biggest automakers may also discuss an expanded business partnership, including Toyota making fuel-efficient compact cars for GM and providing hybrid-car technologies to the U.S. carmaker, Kyodo said, citing sources.” Obviously, this is complete and utter nonsense. Except that maybe it isn’t. If you recall, the last time GM was staring down the barrel of C11, back in May 2005, Rick Wagoner DID hop a Gulfstream for Tokyo and met with then-Toyota President Fujio Cho. The nature of those discussions was never revealed. (Until now: Pachinko!) Students of these turbulent times may also remember that Toyota offered to raise its prices to help GM (I shit you not). As TTAC has pointed out many times, GM’s survival is in Toyota’s best interest; the American automaker sets a profitable “floor” for all U.S. new car prices. This is definitely a rumor worth watching.

Paul Ingrassia’s essay in The Wall Street Journal takes a stab at a question which has preoccupied me for years. How the hell did the American automotive industry, which once was the model of industrial might for the world, become a sickly embarrassment? Generally, blame is apportioned amongst these areas: management, labor unions, government, customers and bad luck. Ingrassia comes down pretty hard on management, with a supporting role for the unions.

Ingrassia opens by pointing out the scant media attention paid to the opening of Honda’s new 200k-Civics-per-year factory. The Indiana opening stands in stark contrast to Motown automakers’ seemingly endless factory closings and layoffs (i.e. paying union workers not to work).

“This situation doesn’t stem from the recent meltdown in banking and the markets. GM, Ford and Chrysler have been losing billions since 2005, when the U.S. economy was still healthy. The financial crisis does, however, greatly exacerbate Detroit’s woes. As car sales plunge — both in the U.S. and in Detroit’s once-booming overseas markets — it’s becoming nearly impossible for the companies to cut costs fast enough to keep pace with the evaporation of their revenue. All three companies, once the very symbol of American economic might, need new capital, but their options for raising it are limited.”

But how did we get here? Product is the key. Ingrassia provides a good list of American post-war hits including the GTO, Caravan, Taurus and Explorer. All were segment busters– and not a one of them was created in the last 17 years. The Explorer launch of 1991 was Detroit’s last breakthrough product. But why?

“In all this lies a tale of hubris, missed opportunities, disastrous decisions and flawed leadership of almost biblical proportions. In fact, for the last 30 years Detroit has gone astray, repented, gone astray and repented again in a cycle not unlike the Israelites in the Book of Exodus.”

Ingrassia gives the transplants props for making allies out of their US workers. In the 1970s, it was still popular to blame the quality problems of American cars on the workers who built them. Honda tiptoed into these scary waters in 1979, opening of a small motorcycle assembly plant in Ohio. Workers were initially frustrated by their task of building a few motorcycles and then taking them back apart to evaluate quality and figure out how to make it better. But they learned the Japanese way. Motorcycle manufacturing proved to Honda that American workers were not the problem.

By 1982, Honda Ohio was cranking-out new Accords. And they never looked back. Two years later, Toyota opened NUMMI joint venture plant in Fremont, California, which still builds Corollas, Tacomas and Pontiac Vibes.

“Meanwhile, in the same year that Honda started building cars in Ohio, General Motors asked the UAW for wage concessions to help ease the company’s financial straits. But on the same day that UAW members voted approval, GM Chairman Roger B. Smith unveiled a new formula that made it easier for him and other executives to earn bonuses. It was a historic blunder.”

Amen to that. Even so, those hit products of the late 1980s and the truck boom of the 1990s allowed Detroit to prosper. But only if you measure success in terms of profits, rather than share. Slowly, calmly, inexorably, the transplants continued eating Detroit’s lunch. By the beginning of the new millennium, Detroit was oblivious to the enemy within its gates. Motown was flush with cash, embarking on a global buying spree.

“In June 2000, GM’s confident new CEO, Rick Wagoner, invited journalists to a resort in Italy’s Alpine lakes to describe a corporate future of ‘fewer cars, more trucks,’ as the Detroit Free Press wrote. Ford’s CEO Jacques Nasser upgraded the décor on the corporate jets and removed the company’s blue-oval logo from the outside of corporate headquarters while the Ford Taurus — once the best-selling car in America — was falling further behind the Toyota Camry and the Honda Accord.”

Easy money in trucks hid the rot within. Who cared that the Taurus had gone from #1 retail vehicle to rental car hell? One Lincoln Navigator made the profits of twenty or more Tauri. But just a few short years later, Katrina sparked the first fuel price run-up in decades. Not much later, the combined forces of growing demand and commodities market shenanigans sent fuel prices in a steep climb which has only recently started to turn around.

Suddenly, the truck boom went bust. The Emperors of Detroit were revealed in all their naked glory. (Well, at least to those outside the gates.) Now, with gas prices are coming down, credit markets have imploded. In these tough time, a Detroit management has long played badly with suppliers, employees and customers suddenly needs all the help it can find. BUT you have to build strong partnerships in the good times to tap into them when the going gets tough. Oops. All those management bonuses for cost-cutting related profits and “hard-headed negotiating techniques” [irony alert] don’t look so good anymore.

What now? Ingrassia gives a slight edge to Ford in the question of who has the best chances to make it out of the nightmare alive; Chrysler is toast already. GM is nearly out of cash. Unfortunately, no one told the feds that only fools rush in.

The dramatic denouement of this sad saga– David Halberstram’s long-predicted Reckoning, will be postponed for the forseeable future. But no matter who– if anyone– emerges from Detroit’s penultimate debacle, the simple truth is that Detroit has no one to blame for their plight but themselves.

[Click here to read Ingrasia’s essay]

Second place sucks. Witness the U.S. Women’s Gymnastics’ squad in Beijing last summer. Pony tails drooped and tears streamed down their be-sparkled cheeks when gold medals were hung on the necks of the young (we swear they’re at least sixteen!) Chinese Olympic team. My heart goes out to Nissan, whose excellent 2009 Altima 2.5 sedan fell just short of the 2009 Mazda Mazda6 i Sport in this comparo.

While TTAC has Tesla on a Death Watch, aspiring Chinese EV-automaker BYD is getting massive street cred in The People’s Republic. In case you’ve got something called a life, BYD stands for “Build Your Dreams.” Since late September, “BYD” also stands for “Buffet’s Yankee Dollars.” Omaha’s Oracle liked the company so much he wrote a check for $230m for a 9.89 percent stake. [NB: Buffet knows the tax consequences lurking in a CFC— and we’re not talking chlorofluorocarbons.] Based in Shenzen, BYD is one of the world’s largest manufacturers of rechargeable batteries for cell phones. According to The New York Times, “the company also has a fast-growing auto-making unit that accounts for nearly a third of its revenue and makes fuel-efficient compact and subcompact cars for the Chinese market.” They have some bitchin hybrid and plug-in cars in the works with specs that scare the BYDickens out of the competition– if they’re half true. OK, make the jump for today’s BYDispatches.

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It was I who invented the name “Maximum Bob” for GM Car Czar Bob Lutz. That said, I also coined “Rabid Rick” for GM CEO Rick Wagoner; clearly, I should have stuck with the Buickman-perpetuated “Red Ink Rick.” John Horner, a charter member of out Best and Brightest and yeoman TTAC blogger, first mooted the moniker “American Leyland” for the federally-funded (one way or another, eventually) GM – Chrysler mash-up. But it’s a keeper. Or is it? Evan Newmark’s column over at The Wall Street Journal’s Mean Street proposes another way of characterizing the insanity to come: “GM = Government Motors.” While I’m not completely enamored by the new name, Newmark’s arguments are entirely seductive. In fact, it’s the best anti-GM bailout diatribe I’ve encountered, here or anywhere else– not that the topic is large enough to deserve a genre, yet. Anyway, I’ve excerpted some of the best bits below, and put it to you, our B&B: American Leyland or Government Motors?

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One of TTAC’s Best and Brightest sent us this little ditty from Credit Suisse re: U.S. new car sales for October. Needless to say, it’s a jug full of that sucks.

• We expect the October annualized light vehicle selling rate (SAAR) to land in a range of 11.5 – 11.8 million vehicles, the midpoint of which would be about 27% below the year-ago month pace of 16.0 million, and about 7% below last month’s pace of 12.5 million.

• We expect October unit volume (selling day adjusted) to be down in a range of 27% – 29% versus October 2007. The seasonal factors are slightly favorable this month (about 1%), which explains why our projected decline in the SAAR is not quite as deep as our projected decline in volume.

• We look for a modest decline in the truck mix in October, to about 49% from north of 50% in September, as much of the excess truck inventory has been cleared as automakers have cut production schedules and thrown big incentives at pickups, SUVs, and minivans.

• By maker, we see GM sales down in a range of 32% – 34% in October. Market share should suffer sequentially as GM experiences payback from its “employee discount for everyone” program that ran in August and September. We expect share of around 23%, down from 29% in September and 25% in the year-ago month.

• We look for Ford sales to tumble 33% – 35% in October, with market share bouncing to around 13.5%, up from about 12% in September (getting a boost as GM’s share comes back to earth), but down from nearly 15% in the year-ago month.

• We expect Chrysler sales to fall in a range of 32% – 34% in October, with market share coming in around 11%, down slightly from last month, and down about 80 basis points versus the year-ago month.

• Foreign brand sales should fall sharply in October as well, but will be supported by a 0% financing program at Toyota. We expect large sequential share gains for the foreign brands, to north of 52% from just under 48% in September.

• Assuming our sales forecasts are roughly correct for the month, we think inventories are likely to end October more overstocked than they were in September.

• Note that our year-end inventory forecast calls for overall improvement in dealer stocks between the end of Q3 and the end of Q4. But our year-end base case assumed a 13.0 million unit Q4 selling rate. To the extent the selling rate runs closer to 11 million units, fourth quarter production schedules at GM and Ford could be subject to further downward revision.

This morning I rolled out of bed, performed my morning ablutions, downed a bowl of Raisin Bran, dropped my sons off at school and started my stop-and-go commute to work. A never-ending stream of blinking taillights precedes me up and down the interstate through the pre-dawn din. Wannabe comedians inanely chatter and squawk through my radio. Finally my exit arrives: a lightly traveled mile-long arcing two-lane spur that connects interstate to turnpike. In a brief burst of adrenaline energy that widens my bleary eyes, I break away from the gridlock and shoot up the ramp. In third gear I push up to 80 mph as my car confidently hunches down and steers precisely through the sweeping turn. By the time I join the turnpike I coast down and assimilate into the flow of the traffic. These brief thrills make me glad that I opted for a sportier, nimble handling family sedan. But I drive an ’01 Accord. The 2009 Accord LX is no fun at all.

How cheap are work trucks when no one’s working? Case in point. 2008 Ford F250 Superduty with rear seats, Automatic, and a throbbing 6.4L V8 powerstroke diesel with 350 Hp and 650 lbs. of torque. 41k highway miles, and, oh yeah. Like most other trucks at the auctions it’s a repo which has become a mantra for Atlanta inventory. Charge out price this morning at Carmax Auctions was $10,500, and that was with absolutely no announcements that would normally detract from the truck’s value (Engine Noise, Transmission Slips, Frame Damage, etc.). Oh, and every other truck and SUV repo that was at today’s sale, didn’t sell. Even a Toyota Tacoma and Hyundai Santa Fe Limited found no buyers.

Toyota outsold GM globally last year. Of course, GM took the low road and claimed they were still number one by dint of their minority partnerships with Chinese automakers. This year, ToMoCo will lift the crown as the world’s largest automaker– joint ventures or no. Anyway, here in the real world, that gig’s been up for a while. More than a year ago, GM CEO Rick Wagoner declared that Toyota’s title-taking didn’t matter. OK, it did, a bit. But it really didn’t; ’cause we don’t have time to worry about that shit [paraphrasing]. After all, we’ll be profitable by…. uh… hey! Is that an SSR? Well, Red Ink Rick’s going to get another chance to play spin the news. CNBC’s Phil LeBeau reports that Toyota’s three U.S. brands could outsell GM’s eight brands in October. “This week is not only the last one of the month. It’s also the week that could determine if GM holds on to the top spot in monthly auto sales in the U.S. Initial reports of October retail auto sales show Toyota outpacing GM and Ford. If that trend holds for the full month, we could be looking at the day many in Detroit have feared for years.” Even if GM doesn’t, Phil worries about the psychological impact of the smack-down.

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We’ve counted ourselves among the many who laughed bitterly when Volkswagen first announced that it was campaigning to overtake Toyota as the top volume automaker in the world. Well, Automobilwoche Editor Guido Reinking has penned a column for Automotive News [sub] arguing that VW’s Mission: Improbable might just stand a chance. Surprisingly, the column is not a paean to German sachlichkeit in the nationalistic mold of most mainstream German auto journalism. Instead, Reinking makes a bold claim: Toyota, long the 800 pound gorilla of global automakers, may be losing its aura of invulnerability. First he points unconvincingly to Toyota’s 32 percent drop in US sales for the month of September, “worse even than the fall taken by sickly General Motors.” Sure Guido, but keep in mind that those are previous-year percentages, not apples-to-apples…
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During his first inaugural speech, given at the height of the Great Depression, President Franklin D. Roosevelt famously said, “Let me assert my firm belief that the only thing we have to fear is fear itself – nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.” Once again, Americans find themselves living through days of economic infamy. Uncertain times and erratic energy costs have cured fearing suburbanites of their predilection for gargantuan SUVs. It’s time for practical pragmatism; inexpensive family haulers that dine lightly on 85 octane and stay firmly bolted together for years to come. To fully understand this segment, I tested and compared a quartet of economy sedans. First up: the Toyota Camry.

Hey! What happened to TTAC’s invitation to the GM “Night on Bear Mountain” mass test drive? If it’s good enough for Autoblog and Jalopnik, it’s good enough for us. Of course, TTAC’s not in the tank for GM. We might do something impolite, like point out that the Saturn Vue 2 Mode Hybrid is an excellent example of everything that’s wrong with GM. (And that’s without driving it.) For one thing, product overlap. WITHIN SATURN. The Vue 2 [a kill] is the second hybrid system for the SUV, which will now sell alongside (in theory) the existing Saturn “light hybrid,” which was initially introduced as the Vue Green Line. It’s a model/technological distinction that will be completely lost on anyone even remotely resembling a potential customer. So, blissfully married and entirely hetrosexual Alex Nunez, who’s this thing for, then?

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No, the Germans don’t want to start retooling for Panzers and offer the world an opportunity to make it ‘3 out of 5’. But Yahoo! News reports that Daimler-Benz will suspend auto production on December 11th and resume on January 12th, due to flagging demand worldwide. This will be true for ALL Daimler owned plants. Although production may return afterwards… who knows? If the world economy continues it’s counter-clockwise spiral, we could see Daimler retool their plants in a similar way to what Toyota has been forced to do in Princeton, Indiana and San Antonio, Texas.