Did you know that Martha Stewart has a horse farm? Well, duh. A wealthy WASP without a Connecticut horse farm is like a Detroit executive without a Gulfstream. To her credit, Suzy Homemaker on Steroids takes that old "I had a farm in the Constitution State" thing to the next level. According to Vanity Fair, the animals inhabiting Stewart's antebellum mansion equivalent are all black. Goats, sheep, dogs, cats, horses– all black, all the time. Get this: because black horses' coats can turn auburn in the summer sun, Princess Tippy Toes II has instructed her horse people (as opposed to horsey people) to keep the equines in their stables until dark. Now that's something with which this OCD automotive website editor can identify. So when I saw Martha Stewart vintage chardonnay at the package store, I just had to quaff. It was/is immaculate. And bland. Boring. As fundamentally characterless as a Toyota, Lexus and, yes, Scion product. Which got me thinking. If Detroit has anything left to add to America's automotive scene, it's soul. The Chrysler 300C had soul. The Ford GT had soul. Other than that, what? Mustang? Nitro? Malibu? And if American soul isn't a gas-guzzling V8, as it can no longer be, what it it? While you're contemplating that conundrum, Justin and I discuss the day's car news. 

As a child I loved to play on swings. Leaning back and kicking my legs forward, I could propel myself into momentary weightlessness. Of course, every good swing ended with an acrobatic dismount. At the point of greatest forward momentum, I would let go of the chains and launch myself off the seat. For a brief moment I would be flying. Like an astronaut on NASA’s vomit comet, I would arc across the back yard. The sensation was thrilling. But I wasn’t a bird. Gravity’s hand never failed to pull me back to earth. And so it is with General Motors. 

Today, The General defies gravity. Officially. The global automaker flies near the top of the newly released Fortune 500 list. Corporate revenues of $182b earned GM the number four spot (down one position) on Fortune Magazine’s Fortune 500, trailing only Wal-Mart Stores, Exxon Mobil, and Chevron. As Borat would say, “High five.”

What’s more, General Motors also scored on the list of The World’s 50 Most Innovative Companies. Collaboratively produced by BusinessWeek (BW) and the prestigious Boston Consulting Group (BCG), GM took eighteenth spot on this tally of cutting edge companies. Unlike the Fortune 500, which is strictly a measure of revenue, the BW-BCG list is based on the survey of 2,950 “senior executives” (weighted 80 percent), records of three-year margin growth and revenue growth (5 percent each), and three-year stock returns (10 percent).

GM, who BW dubs a “dark horse,” must have killed on the executive survey because their financials suck. (More on that later.) Fifty-five percent of survey respondents cited General Motors’ products as their most distinguishing innovation (as opposed to innovative customer experience, processes, or business model). 

Clearly, the tens of millions (not to say billions) of dollars The General’s spent greenwashing its image has successfully advanced the automaker’s high tech rep within the business community’s chattering classes. One thinks specifically of GM’s highly-promoted, oft-delayed, completely unproven, Prius-chasing gas – electric Chevrolet Volt. And then of GM’s Green Car of the Year Award-winning dual-mode hybrid SUVs. But not specifically of anything actually selling in any number.  

I’m at a loss to explain how GM ranks eighteenth of fifty overall behind Toyota (#3), Tata Group (#6), BMW (#14) and Honda (#16) while it is second on the top ten list of innovative automakers produced from the same data by BW-BCG. On that list, GM trail Toyota but edges-out Tata, BMW and Honda. Go figure.

Nonetheless, let us imagine GM flying through the air like a boy slung from a swing, intoxicated by the sweet air of high praise and honor. Now picture a speeding Chevy Aveo slamming into the unyielding off-set crash barrier at the Insurance Institute for Highway Safety. Let’s call that wall GM’s financial report.

During 2007, General Motors suffered $39 b-b-b-b-billion in losses. Among the Fortune 500, GM takes first place in that metric (or last place, depending on how you look at it). Earnings per share fell $68.45, revenue fell twelve percent and assets shrunk $26b. 

In fact, General Motors is the only company in the Fortune top ten that lost money, save FoMoCo (who lost a paltry $2.7b). Even the two banks that cracked Forbes’ top ten– Citigroup and Bank of America– managed to turn tidy profits. This despite the ravaging impact of the well-publicized sub-prime mortgage loan losses. To top that off, from 2004 to 2007, GM stock returns slumped eleven percent.

If that number doesn’t put things in proper perspective, consider that General Motors lost nearly as much as Exxon Mobil made ($40.6b). Combine GM’s losses to those of GMAC ($2.3b)– which The General mostly and wisely unloaded during the year– and GM’s losses would have eclipsed the most profitable company in the world.

Unfortunately, conditions in 2008 are no better than ’07. Near-bankrupt suppliers continue to threaten disruption to GM’s manufacturing plants. Commodities market speculation is driving oil and gasoline prices to new highs, and GM has no credible economy car for the vital U.S. market. The American economy continues to flag and consumers are buying fewer new cars. E85, in which GM is so deeply invested, is fast emerging as an eco-fraud and the Volt’s got no batteries. The labor unions are proving that they will yield no quarter so long as the General has a dollar in the bank, no matter how fast their cash is burning up.

Couldda, shouldda, wouldda. Things would certainly be different today if corporate management had started hopping with their new found sense of urgency, say, ten years ago. Or twenty. Or thirty.  Can General Motors get its feet back under itself before it hits the ground or are they going to land squarely on their head? Either way, despite this week’s headlines, the company is in a financial free fall and it’s going to hit the ground.

Suzuki and Toyota are radically increasing production in China, in an attempt to compensate for faltgering sales in more established markets. Thomson Financial News (via Forbes) reports that Suzuki plans to double production "as early as next year" at its Chonqing-based ChangAn factory. The plant currently churns out 100k Chinese-market Altos. But a recent $144m investment in a new 1.5-liter engine for the ubiquitous (in China) hatchback, and a forthcoming additional $100m + investment in assembly lines, will see production rise to 200k annual units. Toyota is likewise betting long on China; a new factory is under works now in Jilin. Set to open production "some time next decade," the factory will lift ToMoCo's China production to over 1m per year. This will make China the number two manufacturing location for Toyota after the United States, where it builds some 1.5m vehicles annually. This will knock Hyundai out its position of top car manufacturer in China, after the Koreans recently spent nearly $800m to increase output to 600k per year.

For those attending the 36th ADAC Zurich 24 Hour Race 2008 in May, Toyota has a treat for you. Motor Authority is reporting that a prototype racing version of the as yet to finalized LF-A uber-Lexus will be running round the 'Ring. This impresses us because any 24 Hour race is murder on a vehicle. But one at the Nurburgring? That borders on suicidal. Which we like. The final production specs haven't been released/announced yet, but just to jog your memory we're talking about a 4.8-liter V10 kicking out more than 500 horsepower that powers the hot Lexus to more than 200 mph. This prototype racer raises the bar with bigger wheels and brakes, a Superbird-inspired rear wing, tenny-tiny racing style side mirrors; and at least a dozen new inlets, scallops and scoops. Plus, the inside is stuffed with carbon fiber and a roll cage. With the soon-to-be on sale Spec-V version of the Nissan GT-R already lapping the Nurburgring in an insane 7:25 and most likely embarrassing the hell out of Chevy ZR-1 Chief Engineer Tadge Juechter's claim that the Blue Devil will, "beat any production car's track record anywhere in the world," what on earth will this Lexus test mule kick up? (Who cares that the video voiceover is Japanese– just listen to that engine!)

New car sales in the U.S. are depressed (recessed?), but sales of hybrids are up. While accounting for only 2.2 percent of the total U.S. market share, CNN says "Hybrid cars [are] flying out of showrooms." Indeed. Industry sales of some 350k hybrids translated into a 38 percent jump in '07. Toyota's Prius captured 51 percent of the hybrid market. Although most analysts see rising gas prices as the main sales driver, CNN trots out a tree hugger to convince you that many if not most consumers are [still] buying Priora to make a statement: "My decision is a very political decision," asserts Kim Fenske. "I want to get people in this country off their dependency on foreign oil." Anyway, R.L. Polk industry analyst Lonnie Miller figures hybrid sales increased because buyers have more non-goofy-looking options. "It's a good call on automakers' parts to not make their hybrids so funky and out of body style than what's already out there." Yes, well, Miller says 2008 hybrid sales should increase by 30 percent or more. "I can't see the hybrid category totally chilling out." Dude.

After the Chevy Volt makes its U.S. debut, GM plans to sell the  gas – electric hybrid worldwide. GM Car Czar Maximum Bob Lutz has already announced Australian Volt sales will begin "one or two years" after the car's U.S. launch. GM also has their corporate eye on the "very important" European market. But just as the rest of the U.S. will have to wait for California to get their Volts, the rest of the world will have to wait for China. Rick Wagoner says his employer's targeting The People's Republic as the Volt's second market– with one big "if." According to Reuters, GM is "lobbying China's government to provide subsidies for the development and sale" of alternative powerplants. Wagner wants China to provide tax credits and (while they're at it) develop a hydrogen refueling infrastructure for fuel cell vehicles. Of course, much of GM's credibility in such matters (and everything else) depends on a successful Volt launch in 2010, which Rabid Rick admitted is running "down to the wire." God forbid they should release a not-ready-for-prime-time vehicle just to make the deadline…

If I were Toyota, I'd be shaking in my boots right about now. Sure, Scion seemed like a good idea few years back when ToMoCo realized its buyers' median age was seeping into Buick territory. Being charitable, one could call Toyota's youth brand an interesting experiment. Being honest, Scion is schizophrenic. And the kids ain't buying. And now they have some soon-to-be serious competition. Autoweek is reporting that Honda is launching a new "sub-brand" called Li Nian, which apparently means "subject" in Chinese. You're looking at an unnamed concept built off the global City/Fit platform in conjunction with Honda's Chinese partner Guangzhou Honda. The new brand will launch first in emerging markets (China, India) before eventually showing-up here in the States. Getting back to Toyota being frightened — kids might actually enjoy driving a sporty, inexpensive Fit-derivative– as opposed to a de-contented, lousy to drive Corolla hand-me-down. Li Nians should start rolling into dealerships near the guy that took your job in 2010. [There's that date again…]

When The New York Times hired Detroit News writer Bill Vlasic, they acquired one of Motown's most enthusiastic cheerleaders. To be fair, Vlasic has raised his game. Today's tribute to Ford Marketing Maven Jim Farley is an epic hagiography that all but nominates the RI high school grad for sainthood. The lead paints Farley as a tortured (as in deeply caring) soul: "Yet as he sat in an empty conference room before his keynote speech, Mr. Farley was introspective. 'How am I doing? You know, I can’t answer that question, how am I doing,' he said. 'It’s too complicated.'" Not for Vlasic it isn't. Farley's doing great! "A mop of tousled brown hair and a boyish smile lend a disarming youthfulness to a 45-year-old executive who has already put together an enviable track record during his 17 years with Toyota. Despite that unassuming demeanor, Mr. Farley is zealous, driven to resurrect Ford’s image in the American marketplace." Vlasic puts one barb in his love letter: the then-Toyota exec's reaction to GM's criticism of Scion. “I couldn’t care less about Detroit,” he said in 2003. “My prediction is that they will follow us.” Pysch! It's a set-up for Farley's Road to Damascus moment. "'What do I want to be?' he recalled thinking. 'What do I want my legacy to be? Do I want to spend two weeks in Japan debating the price of a new Lexus, or do I want to make a real difference?'" And, lest we forget, real money. But hey, I'm cynical. After reading this four-page puff piece, you would be/will be too.

When a typical "car guy" pictures an electric car, he thinks of GM's EV1. Odd, impractical, expensive and just plain not right. How do I know this? Cause I'm talking about me. Tesla is (in a sense) working to change all this with their hot, Elise-based Roadster. Still, the Tesla achieves its (claimed) 0-60 time of 4 seconds flat through lightness. And as we all know, nothing is more un-American than lightness. Meet the Tjaarda EVX Mustang and its companion the HST Shelby Cobra EVX, both from HST International. Now, these are electric cars for car guys. While the Tesla roadster provides 211 lb-ft of torque at 0 rpm, these HST International mills provide 1,000 lb-ft of twist at 0 rpm. Can I get a hell yeah? All that stump-humping power makes the Mustang scoot to 60 mph in 3.9 seconds. The Cobra? 3.2 seconds. Which is damn fast. Downsides Well, each car takes 8 hours to charge. The Mustang will sticker for $80 and the Shelby will cost you a cool $125,000. Still, can you name another car that can hit 60 mph in 3.2 seconds for so a small (ha) price? Didn't think so. Both cars will be on display this Passover weekend, at the Toyota GP in Long Beach.

I flew into Los Angeles with aspirations of driving something powerful; I had visions of some mighty motor displacing six liters or more. Anything with the letters AMG on the back would have suited me just fine. Instead I was staring at a gigantic Mercedes GL 320 CDI. That's CDI as in "diesel." I reckoned it was going to be a long drive to San Diego. I reckoned wrong.

GM is re-organizing its corporate structure. It’s putting its eight brands into four divisions under four car czarettes, in a three-three-one-one configuration. For those of you who can’t guess which GM brand will go with which (as there’s no neat, logical way to make these groupings), it’s Cadillac, Hummer and Saab; Buick, Pontiac and GMC; and Saturn and Chevy on their lonesome. “We are further streamlining the organization,” GM’s President of North America announced. “To reduce complexity, align resources to improve the consumer experience and improve bottom line business results." It’s a deeply misguided maneuver.

The problem with GM’s restructuring is patently obvious. What exactly does the Cadillac brand have to do with Hummer? Caddy is supposed to be GM’s upmarket answer to BMW, Mercedes, Lexus and (less charitably) Infiniti and Acura. Hummer offers a limited range of pseudo-military, gas-guzzling off-roaders competing with Jeep, Land Rover and Toyota’s Land Cruiser. Saab– an ostensibly Euro (Nordic?) near-luxury brand– is a better fit with Cadillac. But better doesn’t mean good.

The combination of Buick, Pontiac and GMC (BPG in GM-speak) doesn’t offer even a glimmer of unifying logic. Doctors cars (and a CUV), performance-oriented vehicles and gussied-up Chevy trucks? It’s like lemon maple fudge ice cream. Although no one at GM (or within the automotive media) seems particularly bothered by this bizarre new “sales channel” development, how is the “customer experience” improved by the creation of such an odd trifecta of car brands? 

If the customer-facing side of this concept is dubious to the point of dementia, reorganizing GM to “streamline” the bureaucracy to reflect these shotgun marriages makes even less sense. In fact, by placing BPG and, uh, CSH into twin fiefdoms, GM is reinforcing a mistake of gargantuan proportions, guaranteeing that it will forever remain in branding Hell. Think of it this way…

There is no way GM can create compelling products that sustain eight coherent automotive marques by grabbing a generic anycar off the shelf and tweaking it here and there to fit some pre-determined idea of a brand's demands. In theory, perhaps. In practice, the Saab 9-7X. With large scale intra-brand platform, drivetrain and components sharing, the temptation to cut corners, to dumb-down the possibility of brand-specific excellence for “easy money” or the greater good, is simply too great. Ipso facto.

Consolidating BPG and CSH is bound to accentuate this problem. While turning eight hungry mouths into four must be an orgasmic idea for GM’s Beancounter-in-Chief and his Beancounter COO, it will destroy what little remains of GM’s octo-brand equity and sink the company even deeper into its current morass of mediocrity. That’s because maintaining brand independence is not an administrative issue. It’s the key to excellence.

Great brands– and thus great products– are the result of a corporate culture deeply dedicated to particular way of seeing the world. You can argue about BMW’s realization of its "ultimate driving machine" ethos, but this guiding principle dominates every aspect of the German automaker’s existence. You can see it in the choice of office furniture. The pictures on the wall of their HQ’s cafeteria. The hushed tones in the waiting room. And you can feel it around a corner, even in Bimmer’s most “piggish” vehicles.

Compare and contrast this situation with Saturn. If “what is a Saturn” is a tough question, “WHERE is Saturn” is a logical corollary. BMW may have field ops in Spartanburg and Shenyang, but its heart is in Munich. You could make a coherent argument that the Saturn brand died when they left Spring Hill, Tennessee; a southern enclave whose honesty and friendliness informed the entire company.

Putting Buick, Pontiac and GMC under one roof– whether metaphorically or literally– will rip the heart and soul out of all three brands. In many important ways, they will simply cease to exist. The same Borg-like assimilation will afflict Cadillac, Hummer and Saab, with equally disastrous results.

Greater integration of executive control for these six GM brands is the exact opposite of what The General should be doing to guarantee their survival– if their survival is, indeed, the goal. It will accelerate the process of badge-engineering that has bedeviled the company post Alfred P. Sloan. And, ironically enough, the consolidation of power under two executives will exacerbate the executive infighting that has been the hallmark of GM’s long, slow, painful fall from grace.

If you doubt the accuracy of this analysis, re-read Troy Clarke’s quote at the beginning of this article. While the Prez’ suggestion that GM should “reduce complexity” is about as controversial as motherhood, the main, indeed central problem with GM NA is that its products LACK complexity. Or, more accurately, individuality. How does placing six disparate brands into two new fiefdoms create distinct, distinctive and marketable products? Answer: it doesn’t.

Auto Express has new details and a rendering "produced using exclusive insider information" of VW's new city car, the up! Shown in concept form at the 2007 Frankfurt IAS, the up! is a rear-engined city car, powered by a 600cc turbocharged two-pot engine in both diesel and gas form. Eco-friendly is the name of the game for the up!, which is targeting 100g of C02 per km driven and an eye-popping 94mpg. The rear-engine design is not in aid of tail-happy hoon potential, but rather improving crumple zones. A five-door MPV version is also planned, although it will likely have the same height and wheelbase as the tiny three-door. The up! will go on sale first in emerging markets like China and India, where stripped-out versions will retail for about $8k. More luxurious versions will head to Europe later, including rebadged SEAT and Skoda models that will run consumers nearly $15k. With the success of Fiat's 500, BMW's MINI, Daimler's SMART and (presumably) Toyota's iQ, the subcompact city car market is finally approaching maturity. [Ed: We resisted saying the only way is up! Because it isn't. Obviously.]

Ford's Toyota-poached (not in the culinary sense) marketing maven Jim Farley reckons we'll know whether FoMoCo's newly launched Drive One campaign is a success in five year's time. Farley told Advertising Age "We're really trying to remake the image of the company." And no wonder. "Jim Farley's moment of truth came when he told his Santa Monica, Calif., neighbors he was leaving Toyota for Ford. They told him his move was 'heartwarming,' but added that they wouldn't buy a Ford." Heartwarming? And what reason did Farley give for his neighbors decision to avoid The Blue Oval like the proverbial plague? "I realized they had gone past skepticism to apathy." Anyway, Jim'll fix it! "Mr. Farley said that according to a CNBC web survey of 609 respondents conducted after that first 'Drive One' commercial ran, 45% said they already liked Ford. Another 20% said the commercial didn't change their minds about Ford, but another 20% said it did and 15% said it might… Mr. Farley said it's 'pretty cool' that 45% of those polled said they liked Ford already. But there's clearly still a disconnect, he said, because the Ford brand has only a 13% market share. 'What's going on out there?' he asked." Anyone care to steer Mr. Farley in the right direction?

Is there anyone Chryslerberus isn't trying to strike up a deal with? According to Reuters, Germany's Handelsblatt newspaper claims Chrysler is in "quite advanced" talks with Fiat to produce Alfa Romeo cars in the U.S. using Chrysler's factories. The newspaper cited "industry sources" (can you  be any more vague?) as saying "the talks are moving forward." Hang on; isn't that Toyota's tag line? Anyway, Fiat had no comment on the rumor. Chrysler's spokeswoman called the story speculation (ya think?). But she admitted what everyone in Christendom already knows: "there could be other partnerships with other automakers." The questions yet to be answered: will Alfisti accept an Alfa that doesn't come from Lo Stivale? Who has the worse reputation for quality? And why didn't anyone use the date 2010 in this story, except us?

Subarus are supposed to be the Birkenstock sandal of the automotive world; simple, robust cars with a certain sense of style that doesn't care about current fads. Alternatively, you could say a Subie used to be what a VW used to be (before Ferdinand Piech started messing with the brand) plus a boxer engine (once a key VW characteristic) and standard all-wheel-drive. In recent years, Subaru's image has become less and less clear. The automaker's desire to escape the granola ghetto first gave us the Tribeca, and then the new Impreza. And now we have a new Forester; an answer the question that in the past didn't have to be asked: what is a Subaru?