For more than two years, TTAC’s been calling attention to the fallacy of GM’s claims that foreign ops will save the company from bankruptcy. Last week The Wall Street Journal highlighted a fact that caught our eye many moons ago: GM’s much-ballyhooed sales increases in China are relatively unimpressive. “In the first six months of the year, sales growth of GM brands in China lagged far behind the overall sales increase for passenger vehicles… Shanghai GM remains the largest single passenger-car maker in China, but its market share slipped to 8.9% in the first half of 2007, from 10% in the first six months of 2006. The decline has come amid an escalating price war as car makers scramble to entice buyers.” The problem? Same old shit: muddled branding, a rep for poor quality, over-production. The solution? Scary. “General Motors Corp.’s biggest China manufacturing joint venture said it would offer interest-free car loans, as the company maneuvers for advantage in the increasingly competitive China market and tries to encourage people in this cash-centered economy to borrow to buy cars.” Meanwhile, you know the Chinese market is hurting when the world’s largest automaker is cutting back. “The carmaker will reduce output of passenger cars by about 10 percent at its factory in Guangdong province,” Bloomberg reports. “Toyota will slow the pace of production for at least a few months… China’s passenger car sales fell 6.2 percent in August, the first decline in more than three years, as the Beijing Olympics and a slumping stock market prompted drivers to delay purchases”

While we await clarification on how the plug-in electric – gas Chevy Volt’s battery/generator/engine interface works, the stakes just got a lot higher. Automotive News [sub] reports that GM has asked the Environmental Protection Agency (EPA) to classify the Volt as an electric vehicle. “Normally, a vehicle is run on an EPA test loop, consisting of both city and highway driving, to measure tailpipe pollutants and provide data for calculating fuel economy. But for electrics, which have no emissions, the government uses a Department of Energy mathematical formula to translate energy use into some equivalent of miles per gallon of gasoline.” And here’s the kicker: the EPA loop is longer than 40 miles. So how do you test a vehicle that– in theory– runs for 40 miles on battery power and then does, uh, something else with its gas engine? While they sort that out– good luck using politics to sway the EPA– the California Air Resources Board has given the Volt “preliminary certification” as an electric. While the prestigious Society of Automotive Engineers considers the Volt a hybrid (imagine that). If the EPA classifies the Volt an EV, GM would have an enormous marketing advantage over the market-leading (owning?) Toyota Prius, AND receive a HUGE boost to the automaker’s federally-mandated Corporate Average Fuel Economy (CAFE) standards. [TTAC’s Michael Karesh has a proposal for a third EPA standard here.]

While Chrysler jumps headlong into the concept car vaporware EV game, Toyota is taking its usual evolutionary approach. Bloomberg reports that ToMoCo will stick with its Prius strategy, augmenting it only with a Compressed Natural Gas (CNG) burning hybrid version of its Camry sedan. The CNG Hybrid is a response to lower natural gas prices in the US compared to normal gasoline, and the modest success of Honda’s CNG Civic. No pricing or efficiency information is currently available for the CNG Hybrid Camry. Meanwhile, Toyota is still driving down the replacement cost of its Prius-powering NiMh battery packs, which now set first and second-gen Prius owners back $2,299. Calling the Prius “as close to a silver bullet as you’re going to get,” Bill Reinert, national manager of advanced technology for Toyota Motor Sales claims “the reason the Prius was such a successful car is that the customer didn’t have to do anything to it.” And to those who say that hybrids are a “transitional technology,” Toyota will be selling a million Priora per year by 2010, before Chrysler and GM even start selling their highly-touted EVs. Slow and steady, as they say…

There have been rumors floating around that GM approached Isuzu with an offer to sell its mid-sized truck business. Rumors being what they are, multiple sources now say that Isuzu ain’t interested. Japan’s Corporate News reports that Isuzu and Toyota (5.9 percent owners) execs “sounded negative about the possibility the firm may buy General Motors Corp.’s truck operations.” According to that report, the two sides aren’t seeing eye to eye on a price for the operations, proving once and for all what a bitch the used truck market can be. Meanwhile, The Guardian reports that Isuzu President Susumu Hosoi says his firm “will struggle to hit its full-year net profit target and has ruled out buying General Motors’ mid-sized trucks business.” Hosoi-san was unequivocal, saying Isuzu is not even planning on increasing its 40 percent stake in DMAX, a North American diesel engine joint venture with GM. The only place Isuzu is currently planning a new major site? Saudi Arabia, of course. No, seriously…

During the Civil War, General George McClellan headed the largest army in the North. McClellan was an astounding capable soldier– except for the part about fighting and winning a war. He was also insubordinate, rude and a potential political rival for President Lincoln. The president’s Cabinet recommended McClellan’s dismissal. “Who should replace him?” Lincoln asked. “Anybody!” they replied. “I can’t give the job to ‘anybody,’” Lincoln argued. “It will have to be a “somebody.” In the same sense, who can replace GM CEO Rick Wagoner?

It’s true: Rick Wagoner’s career is toast. And not a moment too late. By any metric you can name– profits, market share, market capitalization, debt load, brand strength, anything– Wagoner’s administration has been an unmitigated disaster. In fact, the feds missed an important opportunity to eject Wagoner in exchange for bailout billions. Never mind; his day is done.

But replacing CEO Rick Wagoner won’t be easy. Using a more modern comparison, securing a new General Manager for a professional football team is a walk in the park. There are perhaps fifty candidates who are more-or-less qualified to run an NFL team. Anyone who is anyone in the business knows who they are. Finding someone with the experience to run a global automaker– with millions of sales, dozens of factories and worldwide reach– is a relative bitch.

There are far less international automakers than NFL franchisees.The pool of available managerial talent for GM is a lot smaller than, say, The Detroit Lions. While football teams play with one set of rules using more-than-not similar strategies, carmakers must build hideously complex products (on a five-year timeline) that compete for different customers, subject to thousands of rules, all of which are subject to constant change. Finding someone who fully understands the game, never mind how to win it, is “challenging.”

Worse, GM is a closed society. There are fiefdoms within fiefdoms within fiefdoms. Employees have national, brand, departmental and personal loyalties (to name a few). It’s not for nothing that one of today’s blogs revealed that the man in charge of GM’s Strasbourg plant holds a Harvard MBA– just like his CEO and COO. And if you think intra-mural talent is the answer, look at ex-Toyota exec Jim Press’ progress at Chrysler.

Not only would it be hard for an outsider to get accurate information about what’s going on at GM’s sharp end (or filter what info he or she gets), it would be even harder to ensure that necessary changes are implemented.

Mulally at Ford? Nardelli at Chrysler? Apples and oranges. The Ford family owns enough special stock give Mulally the authority he needs. Same goes for private equity group Cerberus and Nardelli. GM has no single shareholder or directors’ block. Anyone who managed to displace GM’s existing mob would need the support of the board and, realistically, the division heads.

Bottom line: unless the GM board was displaced and company’s current infrastructure destroyed, any replacement boss would “have to be” one of GM’s lower bosses. Not that it matters.

Two years after his Cabinet called for McClellan’s head, Lincoln found his “someone.” General Grant discovered that his new/old army was nowhere near the smooth-running machine he’d had out West. One of Grant’s staff offered a simple solution: get Eli Parker (the judge advocate) drunk on the worst whiskey available, give him a knife and tell him to bring back ten major-general’s scalps. Grant was intrigued, “which ones?”

Wrong answer. Grant’s problem wasn’t so much the individual major-generals as the fact there were too damn many of them.

And so it is with GM. Once again, the root of all evil is logistical inertia, or lack thereof. General Motors North America is hamstrung by its surplus of brands; hence products, dealers, marketing and mandarins. Even with GM’s new “four channel” internal and external realignment– HUMMER, Cadillac, Saab; Buick, Pontiac, GMC; Saturn and Chevy– there still are too many hungry mouths too feed. And execs feeding them.

GM’s size was once its main advantage. It’s now its greatest weakness. With the U.S. market shrinking and share dropping, all that once-impressive industrial might just means more to cut. Worse, the sheer size of the company makes it very hard to cut effectively. Every cut must be filtered through the demands of four or more “lines” and double that number of brands. Worse, each change disrupts the balance of power between the divisions within the company and on the market.

Finding another “someone” to create effective regime change at GM, someone who can act decisively then track and balance the progress of his or her changes, could well be impossible. But it’s worth a try. As for the current administration at GM, let’s give “Honest Abe” the last word. “Stand with anybody that stands right, stand with him while he is right and part with him when he goes wrong.”

Where would we be without Digg? Thanks to the collective hysteria of a thousand Diggers, we learn that the Gas 2.0 blog is baffled by the fact that Toyota builds an AWD hybrid minivan that gets 40 mpg and doesn’t sell it stateside. Gas 2.0’s Nick Chambers has fond memories for Toyota’s old Previa, and damns its US-market replacement, the Sienna for being a gas hog. But the spiritual successor to the Previa, the Estima, has been sold to the Japanese in hybrid form since 2001. The baffling unfairness of it all even had the Union of Concerned Scientists in a tizzy, circulating an online petition urging Toyota to bring the Estima hybrid to the states. Which it almost certainly won’t. A hybrid Sienna is considered likely to arrive sometime around 2010, but that’s not impressing people who are new to the concept that US-market vehicles consistenly lag behind Euro- and J-market offerings in efficiency. “Yo, Toyota,” writes Chambers, “you’ve already got a minivan that half of the families in the US would kill for, what the hell are you doing investing so much energy in redesigning a has-been?” Dude, if you love it so much just buy one. Oh wait, does that say it costs $39,600? Now it’s starting to make sense…

As Farago mentioned earlier, the Senate has approved a consumer-end PHEV tax credit of $2,500-$7,500, which Automotive News (sub) modestly calls “Volt-friendly.” By which they mean it was designed specifically for the Volt, making the size of the credit dependent on how much charge a qualifying vehicle’s battery can hold. And though battery capacity is a poor measure of efficiency, choosing that metric handily favors the Volt’s EREV design which qualifies for the maximum tax break, while Toyota’s plug-in Prius won’t. And people say that GM’s $14.3m lobbying budget is a waste of money. But America’s Volt subsidy isn’t limited to DC. The Michigan Economic Growth Authority has approved $130m in tax breaks to attract Volt production to the state. The package includes a $122.5 million state tax credit over 15 years for the $838m overall investment and a $10 million brownfield tax credit for the Flint engine plant construction. Automotive News (sub) reports that GM need only retain about ten percent of the 20k jobs at the five existing sites to qualify for the tax benefits. With GM getting a chunk of the $25b bailout loans for production plus $130m in tax breaks and a $7,500 consumer tax break for consumers, the Volt had better freaking cost less than $40k. Not that anyone’s holding their breath.

Let’s get one thing out of the way right from the start: the Kia Borrego might list for a couple grand less than a 2008 Explorer, but the larger rebate on the Ford eliminates this advantage. The story is similar with other established SUVs. Since the Kia won’t cost significantly less than its highly evolved competitors— at least until Kia tosses some similarly serious cash on the hood—the late-to-the-party truck better have another major selling point. So…

Ending a sentence with a preposition is something up with which I will not put. And when this literary faux pas emanates from a professional copywriter, well, how do you say “insupportable!” (Hopefully with Gallic disdain.) Shame on you, Mssr. Vinny Manchillo, chief creative officer of Scott Howell & Company and guest columnist for AdAge. “Electing a public official is almost exactly like working on another type of traditional advertising account. One that, unlike political advertising, everyone is clamoring to work on. Political advertising is just like working on a car account.” Yes, “Barack Obama is a stunning orator and tremendous motivator. More than a candidate, he’s a personality-driven movement. For his supporters, that far outweighs any shortcomings he may have in his experience or voting record. He is a Ferrari.” So what does that make McCain? A Toyota Camry. So much for Obama, then. Take that as gospel from a guy who was a stand-up comic and lawnmower racer before he worked on the Subaru account. Unless you’re Scott Monty, Global Digital Communications guy for Ford Motor Company, who thinks it’s “interesting that you [Vinny] chose two foreign cars for candidates for President of the *United States.*”

Edmunds has a new review on the InsideLine home page. “BMW M3 vs. Audi RS5. V8 German Supercoupes Face Off.” And they subtitle it “2010 Audi RS5 meets 2010 BMW M3 CSL.” Except that they don’t face off and they don’t meet. There is no RS5 as of yet. And BMW cancelled the M3 CSL program. Edmunds has no review to offer here, and instead puts forth an anticipatory preview of what the two cars might be like in contrast. The ample pictures of the cars in motion are photochops. This isn’t the first time Edmunds has pulled the “click on our link” bait and switch, either. In February, before either car was on sale or available for even the most committed online buff book (Edmunds Inside Line) to drive, EIL “conducted” a comparison test between the Camaro and Challenger. This kind of dishonesty is not necessary. There’s nothing wrong with titling a post a “prospective preview” or publishing it as TTAC has done: as an editorial. But to mislead people into thinking that this is a “face off” between two cars is nothing but misdirection. In Edmunds case, it is particularly difficult to tell this is just a stats-based preview because they so regularly have access to preproduction cars. So it’s plausible that they could have driven the 2010 RS5, even if they are describing it as “coming down the pipleline.” I’m not as angry as I sound, but it’s crucial to keep in mind that when large websites squander the advantages – and the clean slate – offered by being online, they leave themselves looking no different than the print buff books.

After presidential candidate John McCain took a ration of you-know-what for his daughter’s Japanese-built Toyota Prius, Newsweek‘s revelation that the McCains own 13 cars is bound to put the Arizona senator in the firing line. “McCain’s personal ride, a 2004 Cadillac CTS, is no gas sipper, but it should make Detroit happy because it’s made by General Motors. ‘I’ve bought American literally all my life and I’m proud,’ McCain said in the interview with Detroit’s WXYZ-TV. But the rest of his fleet is not all-American. There’s a 2005 Volkswagen convertible in the garage along with a 2001 Honda sedan. Otherwise, there’s a 2007 half-ton Ford pickup truck, which might come in handy on the Sedona ranch; a vintage 1960 Willys Jeep; a 2008 Jeep Wrangler; a 2000 Lincoln; and a 2001 GMC SUV. The McCains also own three 2000 NEV Gem electric vehicles, which are bubble-shaped cars popular in retirement communities.” And here’s the kicker: Johny’s Caddy is the only car registered in his name. “Cindy McCain’s name is on 11 vehicles, though not the one she actually drives. That car, a Lexus, is registered to her family’s beer-distributor business and is outfitted with personalized plates that read MS BUD.” Meanwhile, the Obamas own a Ford Escape Hyrbrid, after Barack took some heat for his “gas-guzzling” (Canadian-built) Chrysler 300C.

There was a time when TTAC had excellent access to press cars; back when we were flying under the radar. And then I mentioned the striking similarity between the Subaru B9 Tribeca’s front end and a vagina. But even when I had a first-class seat on the four-wheeled gravy train, my local supplier had trouble feeding my Jones this time of year. The seasonal drought came courtesy of the North American Car and Truck of the Year Award (NACOTY). The peer-selected jurors– many of whom never met a junket they didn’t not disclose– get first crack at week-long stints in, well, everything. This despite the fact that winning the award is no guarantee of sales success– and can someone please explain how the Chevy Malibu won the ’08 gong when it’s a mild reskin of the NACOTY award-winning Saturn Aura? In short, I’m not a big fan. While we gear-up for TTAC’s Ten Worst awards, it’s still interesting to see what all these middle-aged (plus) white men think constitutes automotive excellence. Shortlist, cars: Audi A4, BMW 1 Series, Cadillac CTS-V, Dodge Challenger, Ford Flex, Honda Fit, Hyundai Genesis, Jaguar XF, Lincoln MKS, Mazda 6, Nissan GT-R, Pontiac G8, Toyota Venza, Volkswagen Jetta TDI. Shortlist trucks: BMW X6, Chevrolet Traverse, Dodge Ram, Ford F-150, Honda Pilot, Infiniti FX35/50, Kia Borrego, Mercedes-Benz ML320 BlueTec, Nissan Murano, Saturn 2-Mode Hybrid, Subaru Forester, Volkswagen Tiguan.

Oh GM Fastlane blog, how you wow us with your weak-wristed defenses of GM’s endless parade of missteps. The latest round of apologia (appallogia?) is a shameless response to widespread autoblogosphere criticism of the decision to bring the Aveo-cannibalizing Pontiac G3 stateside. And it’s good to the last drop of brand-destroying denial, utilizing GM’s now-trademark “myth-and-debunking” format. Jim Hopson of Pontiac communications asks himself if the G3 isn’t “just a re-badged Chevy Aveo.” His answer? Toyota brand-engineers Lexus, so it must be fine. Looks like someone needs to catch-up on the differences between platform-sharing and brand-engineering. Speaking of Toyota, will the G3 steal sales from the Vibe? Hopson argues that the comparison is like saying the Corvette and Yugo overlap because they both have four wheels. Nice. How can the G3 be a Pontiac? “Because it’s sporty and fun-to-drive when compared to many of the cars in its segment.” Besides, it has the lowest price and highest efficiency of any other Pontiac, an achievement on par with being the “best microbrew in Utah.” Even the usually-credulous FastLane commenters aren’t having any of it, chiming-in with opinions that follow the basic sentiment “I can not believe how stupid this is.” Neither can we.

Up to now, it’s been a two-way PHEV cat fight. Within the last 24 hours, Toyota said GM’s lithium-ion approach sucks eggs and took on GM’s Volt-only $7500 federal tax rebate. GM Car Czar Bob Lutz retaliated with “Eat My Dust” comments on his FastLane Blog. And now it’s a three way, with Honda telling the world that it just isn’t feeling the whole EV thing. “For battery-powered vehicles to become more widespread, more popular in the market, we feel battery technology needs to advance further,” Masaaki Kato, president of Honda Motor Co.’s research unit, told Bloomberg in an interview [quoted in The Financial Post]. BANG! “We just don’t see it providing the type of driving performance you get with a gasoline-powered vehicle.” BIFF! “The key is in the end we need to conserve the world’s energy resources and protect the environment for future generations,” said Jerry Chenkin, executive vice-president of Honda Canada Inc. OOOPH! “Honda is concerned that these other plug-in hybrid technologies are not really conserving anything.” ZAP! “Lithium-ion powered cars would not satisfy most consumers, since such batteries are costly and still hold less than half the energy of gasoline by weight, Mr. Kato said in the interview.” ZOWIE!

Why is GM Car Czar Bob “I Stopped Making Sense Years Ago” Lutz so damn defensive about the Volt’s design? Writing on the FastLane Blog, Maximum Bob wants to tell all those naysayers (oh me! choose me!) to shut the Hell up. “The Volt is going to be bought… for the emotion tied to the technology contained therein.” And while he’s at it, Bob takes yet another sideways swipe at Toyota (who are none to pleased with The General‘s alt prop lobbying these days). “In terms of the impact of Volt on the automobile industry, I think you’ll see lithium-ion technology filter out to the rest of the industry, even to our competitors who initially said it wouldn’t work,” MB hints hubristically. “I think they’ve figured out that we may well be onto a winning formula here, with 40 miles of driving powered by electricity from a battery and a small engine — powered by gasoline or E85 — to create additional electricity to power the vehicle for several hundred additional miles. I suspect most of our competitors will have vehicles with technology similar to the Volt within four or five years.” Bob touts the patriotic side of the project, and then gives TTAC (et al) the middle finger. “With the Volt, you go home, you plug it in, and you’re done. And for roughly 80 cents’ worth of electricity, you’ve got a fully-charged battery, ready to take on another forty miles of gas-free and tailpipe-emission-free driving. If that’s greenwashing, then come on in — the water’s fine.” What, into the washing machine?