Contrary to popular belief, panic is a logical reaction to an external threat. When a cornered animal’s fight or flight responses are unavailable or exhausted, acting erratically is its only hope. GM has been showing signs of panic for some time: on-again off-again product plans, vainglorious boasts, mistimed marketing, ill-advised divestiture and more. Recent events indicate that the domestic automaker’s aberrant behavior is escalating; leading, I’m afraid, to extinction. But let’s start with the meta-weirdness and work our way back to specific inexplicability. 

“What should power the world's vehicles in 20 years? How can personal transportation become more sustainable in an age of increasing global competition for resources? What role will the automotive industry play in developing markets?” The PR folk introducing GMNext.com have a firm grasp on the do-or-die issues facing GM. Equally obvious: their employer doesn’t have a coherent plan for addressing them.

Why else would GM open the “debate” to the general public? OK, sure, CEO Rick Wagoner says the site’s about “introducing some of our ideas for addressing critical issues concerning energy, the environment and globalization” to “spark a broader, global discussion on these important topics.” But GMNext’s overarching, underlying message is that the company’s product plans are an ill-defined work in progress. No wonder GMNext.com suffers from the usual GM ADD, promoting everything from OnStar’s Slow Down technology to the Volt’s erstwhile battery.

On one hand, fair enough. It’s an internet world. Power to the people! (As if.) Technology is in flux. React quickly and go with the flow! (As if.) On the other hand, if General Motors doesn’t already have a well-established plan for its future– from next Monday to 20 years away– we know someone who does.

Unlike Toyota, GM is panicking; flailing about; trying to find a way out of truck-heavy Hell. Instead of rallying the troops and heading in one direction, GM’s flying off in all directions, with predictably bizarre results. For example, GM’s “import fighter” is importing and rebadging a Belgian subcompact– and taking pride in the fact that Californians can’t identify it as a Saturn (see: GMNext.com). It's launching a bread-and-butter sedan with a $150m ad campaign– calling the Malibu “the car you can’t ignore”– with only a handful of new ‘Bu’s on the ground.

After dismissing the hybrid Prius as a marketing gimmick, GM’s poured billions into their own gas – electric system– for 5000lbs. SUVs. Meanwhile, after pronouncing that the new Chevrolet Volt will kick the current and next generation Prius’ ass come Spring, GM’s pulled back from the timeline– while continuing to promote the Volt some THREE YEARS before its POSSIBLE launch.

The confusion continues. GM’s just announced that they’ve killed their Ultra-V8 engine project: the new powerplant that would have [finally] replaced the ageing Northstar to power the next generation of GM luxury cars. Are they seriously suggesting that big Caddies– supposedly the standard of the world– don’t need the world’s best V8? Which reminds me: GM’s on-again, off-again plans for a range of rear wheel-drive models remains… undecided.

The last issue brings us to the other hallmark of panic (besides illogical behavior): anger. A panicking animal is suffused with adrenalin. In this case, anger’s afflicting GM Car Czar “Maximum Bob” Lutz, the man who must [eventually] decide on GM’s new drivetrains and platforms in the face of a new, more restrictive legislative environment. 

"Now that we have the 35 miles-per-gallon fuel economy mandate by 2020, I am hoping that in 2008 'Professor Doktor' David Friedman (research director, clean vehicles program, Union of Concerned Scientists) and his 'highly-qualified' band of allegedly concerned, self-proclaimed scientists will turn their energy toward showing the world's automotive industry exactly how those numbers, using existing technology and 'costs of a few hundred dollars at the most' can be attained with a vehicle selection that even remotely resembles the cars and trucks Americans want to buy today.”

The new federal regs represent a sea change in the regulatory landscape that all but the most ostrich-like industry players saw coming years ago. It scarcely seems credible that GM was waiting for the laws to be officially official before deciding on how to meet their requirements, including GM's platform strategy. But that’s the simple truth of the matter. Having waited too long, having no concrete plans for answering the vital mpg questions, Maximum Bob lashes out.

Mr. Lutz’ anger is an astonishing indication of the denial, confusion, paranoia and panic going on behind the scenes at GM. But it’s no surprise. The automaker’s non-existent branding strategy is all the evidence needed that GM is simply lurching from crisis to crisis, without rhyme or reason. While it's true that panic can work to an animal’s advantage– combining energy, surprise and luck to overcome mortal danger– panic is the survival strategy of last resort. After that, nothing.

The [literally] rivet counting debate over whether or not one should include the Scion brand in Toyota's sales totals– to determine whether or not Toyota's overtaken Ford as America's top automotive brand– seems to have sailed straight over the media's head. In the hangover morning after December's dismal new car sales results, the mainstream press has pronounced Toyota the new champ. The news ain't all good for ToMoCo. Reality has forced them to rein-in their previous '08 throw-down, where they predicted a three percent sales growth for '08. The Wall Street Journal reports that company spokesman Irv Miller told some industry types that a "confluence of factors," including a widespread credit crunch, high gasoline prices, a housing downturn and "critically fragile consumer confidence" has forced his employer to revise the number downwards. The Japanese automaker says it's now looking at a one to two percent gain for the year. Echoing GM's spinmeisters, contradicting most every gainfully employed financial analyst, Miller reckons sales will rebound in the second half of '08. Meanwhile, the Houston Chronicle says sales of Toyota's Texas-built Tundra fell short of the company's 200k target by 3,445 trucks. "Like the rest of the industry, the full-size pickup segment saw its fair share of challenges in 2007," said Toyota brand manager Bob Carter. Hell boy, you ain't seen nothin' yet. 

My first TTAC-exclusive rendering for 2008: Toyota's eighth incarnation of the Celica. Toyota has already given us a few tips regarding the looks of their next sports car via the FT-HS Concept. However, the concept car has lots of “show-thingies” that are as unfit for market release as the vowel-less name. Gone will be the “hybrid-synergy-drive” hood scoop, the fancy roof or the unnecessary rear air intakes. Other parts like the expensive carbon-fiber compound wheels or the tiny mirrors will be replaced with components better fit for mass production and road-use. I also believe that the front air intakes will be a bit larger, as proper cooling is very important in a performance car. I added two extra intakes underneath the front lights, because I thought they will temper a bit the original “yacht-smile” of the FT-HS. The lights will feature more conventional technologies, the usual H9 and or Xenon lamps + LEDs for signals, that giving them a slightly different look. As always, we shall see what we shall see…

[For more Avarvarii photochopistry, click here.]

As Bloomberg reports, it all comes down to this: do you count Scion sales in Toyota's sales totals or not? If you do, Toyota can– and will– claim bragging rights as America's best-selling car brand, topping the '07 sales charts. If you don't count Scion, Chevrolet reclaims its title from Ford; an honor Chevy last earned in 2005. "Through November… Toyota sold 2,101,804 cars and light trucks, for a 35,524-unit advantage. Without Scion's 121,237 vehicles, Chevrolet would be on top by 85,713." Argument for Scion's inclusion: "Toyota spokesman Xavier Dominicis: 'We've always counted it that way, and it's sold only at Toyota dealerships.'" Supporting logic: Lexus products aren't considered Toyotas because they're sold in discreet dealerships. Autodata includes Scion in its Toyota-brand total. Argument against assumptive Sciontology: "'I don't think for a second that Scion is a Toyota vehicle; it's clearly its own brand,'' said Tom Libby, an analyst for J.D. Power and Associates. 'You might as well count Pontiac vehicles as Chevrolet sales if you think Scion's a Toyota.''" Supporting logic: Libby's employer and Ward's Automotive separate Scion from Toyota in their tallies. To its credit, Bloomberg plays the GEO card; the now-defunct brand (R.I.P. 1977) brand sold through Chevy dealerships. Back in the day, GM combined GEO and Chevy's sales totals. Ah, but according to Chevy flack Terrance Rhadigan, GEOs wore the Chevrolet bow tie, while Scion's aren't branded Toyota. We report, you decide.  

There's more than a little fact-glossing in a USA Today article on disappearing domestic-tied car dealers. "Having shuttered factories and eliminated hundreds of thousands of automaking jobs, Ford Motor (F), General Motors (GM) and Chrysler are now turning their attention to weeding out weaker dealers in bigger metro markets. They make fewer vehicles, so they don't need as many places to sell them." Translation: "weeding out weaker dealers" = paying off some of their dealers before the franchisees starve to death. "They make fewer vehicles" = losing market share like an hourglass loses sand. Although it's a tough job making people feel sorry for a car dealer, Chris Woodyard's tale of Keystone Ford's terminal illness gits 'er done– without dwelling overmuch on Detroit's culpability. Thankfully, there's some good old fashioned hard news here: the paper's [unattributed] Big 2.8 domestic dealer tally. "GM has reduced its dealerships by 229 to 6,807 in the past year; Ford had shrunk by 139 to fewer than 4,140 as of July; and Chrysler had eliminated 142 to 3,607 as of October." Compared to Toyota's roughly 1500-store U.S. dealer network, Detroit's numbers indicate Motown's still wearing a bloated albatross around its neck. So to speak. 

Writing for Reliable Plant magazine (how appropriate is that?), Lean Enterprise Institute founder Jim Womack offers insight into Toyota's management style. Womack says that ToMoCo solicit workers' opinions on job-related problems– like a lot of companies. But Toyota doesn't take the kvetching at face value. "They challenge the employees and enter into a dialogue about what the real problem is. (It’s rarely the problem showing on the surface.)" The semi-confrontational style continues through the search for solutions and a measure of success. "The manager challenges the employees every step of the way, asking for more thought, more facts and more discussion, when the employees just want[s] to implement their favored solution." Apparently, this shows Toyota's "respect" for its workers. Semantics aside, a comparison between two distribution centers lies at the heart of Womack's analysis. In plant A, "management was focused on controlling the workforce through individual metrics. Employees were told to get a given amount of work done but given considerable latitude on just how to do it." In plant B, "the management had worked with employees to create standard work for every task and had introduced visual control with status boards so everyone could see how everyone else was proceeding with their work." Guess which one was run by Toyota, and how and why Womack found it superior. 

I once worked for a colonel who'd address all obstacles by saying "you can solve any problem if you throw enough money at it." While our budget officer would have to breathe into a paper bag for a half hour afterwards, the colonel always managed to squeeze whatever was needed to resolve the crisis du jour from the budget– and solve the problem. Automakers native to the People's Republic of China (PRC) must have bugged his office; they've adopted the exact same philosophy.  

Successfully implementing the "I'll buy what I need" strategy requires two things: 1) money and 2) knowing where to spend it. The Chinese automakers certainly meet criterion number one. The PRC is now the world's second largest auto market; auto sales are booming. The Chinese law requiring all foreign automakers to buddy-up with a domestic partner has delivered unto them an enormous financial windfall.

Criterion two– locating mission critical knowledge and/or technology– is a no-brainer. While there have been auto factories in the PRC since the mid ‘50s, the Chinese auto industry discovered the technological benefits of the aforementioned joint ventures (JV) since A Flock of Seagulls first flew. For the last thirty years, Western JVs have been flooding the PRC with new automotive designs, products and processes. 

Initially, these JV partners used Chinese labor to assemble automobiles already in production elsewhere. The Chinese partners learned how to bolt together a car, but not much more. By the 1990s and early 2000s, the foreign partners had started designing models specifically for Chinese consumption, retooling their plants for full-scale manufacturing.

At this point, several "independent" Chinese auto manufacturers (i.e. companies not enmeshed in joint ventures) began leveraging their newfound carmaking skills to send in the clones: selling exact replicas of other manufacturer's models built for Chinese consumers. 

Blinded by golden goosehood, stymied by laughable and unenforced Chinese copyright and trademark laws, GM, VW, Ford and others turned a blind eye to this sincerely flattering fraternal competition. Western automakers wrote it off as the cost of doing business in a military dictatorship. Besides, in China's burgeoning automotive market, there was– and is– plenty of pie for everyone! Of course, Chinese manufacturers had bigger plans…

For the last decade of so, Chinese automakers have started eying foreign markets. As they dipped their entrepreneurial toes into Western climes, they realized they lacked competitive cars, and the engineering expertise to design them. Disastrous European crash testing literally drove the point home.

So Chinese automakers have started throwing money at European and North American automotive companies. Michael Laske, president of Austrian-based AVL China, says "The Chinese fundamentally lack products and knowledge, but they need to get into the market very quickly." And so AVL is banking big bucks, designing an entire engine line from the ground up to pop China's Chery.

Companies selling world class technology in so-called mature markets are falling all over themselves in their rush to cater to China's hunger for the best of the best. The list of successful sellers includes BorgWarner (turbochargers, clutches, transmissions), Sweden's Autoliv (safety systems), Austria's Magna Steyr (marketing strategy, legal requirements), Robert Bosch (diesel technology),  Italdesign-Giugiaro and Pininfarina (design assistance) and A.T. Kearney (management consultants). 

The joint venture partners are infusing their Chinese partners/competitors with cutting edge technology. GM has an engineering and design center in Shanghai, soon to be joined by a hybrid research center. To provide Chrysler with a small car for the U.S. market, Chrysler's engineers are tweaking every aspect of Chery's operations. So what happens next, once this technology transfer is bang up-to-date?

China's domestic automakers will use their imported expertise to export cars abroad. Chery is already selling cars in Mexico; they've declared their intention to enter the U.S. market in the next two to three years. Chinese automakers will be out in force at this year's North American International Auto Show.

To further the cause of global export, the Chinese government is pushing their domestic auto makers to merge into a "Big Three" and a "Mini Three." Given the government's protectionist views, once the mergers and reorganizations are over, GM, VW, Toyota et al will find themselves out in the cold.

Western manufacturers seem blissfully unaware of their own usurpation. They keep pouring money and engineering talent into China– even as the Chinese manufacturers are taking the first steps toward merging into megacompanies. Once again, western car companies are so blinded by the money they're making that they can't see the dangers lurking beyond the next quarter's bottom line. 

But hey, that's the way the fortune cookie crumbles. If we don't do it, someone else will. Make hay while the sun shines. Pump and dump cuts both ways. That kind of thing. But any automaker that doesn't see China as a short term play, that stakes its long term financial future on the PRC, is headed for a rude awakening. Sooner rather than later.

Hertz has jumped on the enviro-bandwagon. Their new Green Collection consists of cars with "EPA Highway Fuel Efficiency rating of 28 Miles or more per gallon." There are currently six cars in the Green Collection, each reservable by name: Toyota Prius and Camry, Ford Fusion, Buick LaCrosse, Subaru Outback and Hyundai Sonata. Interestingly, other cars in Hertz' fleet that meet their arbitrary mileage criteria (e.g. the Toyota Corolla and Hyundai Accent) aren't invited to the party. The TV ad bragging about their environmental friendliness only mentions the Prius– to the point where you've got to wonder if Toyota co-sponsored the come-on. Of course, the green-washing fails to mention that the rental car company's fleet also includes gas guzzlers that go by the name of Hummer H2 and H3, Cadillac Escalade, Lincoln Navigator and Town Car, Ford Shelby GTH, GMC Yukon and Chevrolet Corvette. Now that would be an inconvenient ad.

According to a New Year's PR greeting from ToMoCo Prez Katsuaki Watanabe, Toyota is going so damn green you'd be hard-pressed to find it in a field of clover. Just before I nodded off (sorry), Watanabe pledged to "contribute to the sustainable development of society and the earth in the future" in three main areas: research and development, manufacturing and social contribution. Yada, yada, "sustainable mobility," "cellulosic ethanol," "planting trees" and "hands-on environmental education at the Forest of Toyota." And now for the real news: Toyota wants to achieve "hybrid vehicle sales of 1 million units annually as soon as possible in the early 2010s," and put a Synergy Drive (possibly lithium-ion equipped) into every one of their models (hybrid Tundra?). As for those pesky quality issues dinging their brand rep, Watanabe is so committed to rectifying the situation he's quoting himself: "I am always saying that 'without improving quality, Toyota cannot expect to grow', and I believe that quantitative growth is the result of improved quality. For this, we understand well that corporate management must achieve growth that maintains a balance between corporate activities and environmental preservation, as well as between volume and quality." What, a pragmatic approach to multiple demands rather than seamless spin and endless hype? Where's the fun in that?

"Other than a borrowed grille from the Camry SE, some 'character lines' in the sheet metal and the Camry’s 2.4L 4-cyl. engine/5-speed automatic transmission in the top trim, there’s little to get excited about with the new model." WardAuto proclaims that "Toyota has delivered a downright boring Corolla for ’09." On one hand, Christie Schweinsberg seems to appreciate the value of vanilla, pointing out that the Corolla didn't suffer a sales slump prior to the new model's introduction (a la Honda Civic). But she can't get her head 'round the fact that Toyota didn't do, well, anything about the Corolla's narcoleptic sheetmetal and driving dynamics. And that's bad because…? "Toyota says it is aiming to conquest Mazda3 buyers, the youngest demographic in the segment, with its new Matrix hatchback rather than the Corolla, but that seems shortsighted. A more dynamic Corolla would have given Toyota more ammunition with which to target that crowd." Or less pleasure for its existing customers. The article disses the Corolla's delayed intro while flagging ToMoCo's quality issues (the reason for the delay). Schweinsberg concludes with a quote that could have come straight from the mouth of a domestic competitor. Oh wait, it did. "But with Toyota’s quality reputation beginning to suffer just as competitors are building better small cars, there’s no guarantee the auto maker will be able to continue selling '350,000 appliances a year,' as a competing OEM exec recently put it."

"And even those who keep paying their [car loan] bills may reach a point… where they simply can't afford another car. That could send vehicle sales down the drain, a nightmare scenario for an industry that has already taken a hit this year from slower consumer spending and higher gas prices." This little tidbit in the LA Times underscores a point TTAC made when GM first offered "Anyone with a Pulse" zero percent financing: easy credit creates short term gain leading to long-term pain. The Times identifies four warning signs that the easy credit chickens are coming home to roost. First, loan durations are growing. "Nearly 45 percent of loans are for longer than six years. Toyota Financial Services and Ford Credit are offering seven-year financing. And a few credit unions are tinkering with the eight-year note." Second, the loan amount is rising. "In October, the average amount financed hit $30,738, up $3,500 in just a year and nearly 40% in the last decade." Third, more and more customers are "backwards" on their loans, by a larger amount. "Today's average car owner owes $4,221 more than the vehicle is worth at the time it's sold." And fourth, an increasing number of these negative equity car owners are hanging fire on new cars– or simply defaulting. "S&P says delinquencies of more than 60 days on car loans issued this year to borrowers with the best credit are up 20 percent compared to those issued last year." Manufacturers and consumers alike are learning there's no such thing as a free car.

I know TTAC is the hard man of the autoblogosphere, but sometimes I can't resist taking a walk on nerdy side (and the pistonhead girls go do do do do…). The International Herald Tribune addresses one of rivet counters' most vexing questions, as above. Previously, on "You Need To Get A Life," Trib author Jan Freeman declared that the appropriate term for more than one Toyota Prius was "Prioria." Reader Christopher Casey took exception, kinda. "You were right that Prius is the neuter nominative/accusative singular of the adjective prior, but the plural forms of the word – which means 'earlier, better, more important'- would be Priora, not Prioria." Freeman rang-up Harry Mount, author of "Carpe Diem" (a.k.a. "Latin isn't half as dull as you think it is. More like a quarter"). "Yes, it's Priora," he told Freeman, "because it's neuter plural. But if you cheated a bit and made the car masculine or feminine – and I do think of cars as female – then it would be Priores. And Priores has nice undertones of grandness – Virgil used it to mean 'forefathers' or 'ancestors.' So if your hybrids are named for the dames of ancient Rome – Drusilla, Octavia, Agrippina – you're granted poetic license. Otherwise, Priora is the Latin plural you're looking for." Mea culpa! TTAC's been using Prii. We sit corrected. 

It probably seemed like a good idea at the time: introduce American car buyers to Nissan’s new cute ‘ute in an episode of NBC’s hit show Heroes. And so we see the Rogue in the hands of a world saving high school cheerleader– ensuring its chick-car status for all eternity. And then rogue crooks swipe the CUV and drive it to Mexico. Demonstrating what? The car is easy to boost? Why didn’t technopath Micah Sanders get a booster seat, take the wheel and show Ford the true meaning of “sync my ride?” All of which leaves me wondering: is the Rogue good enough to survive its own marketing?   

Going one better than Jerry Flint's Lutz-lust, Newsweek's Keith Naughton nominates GM's Car Czar for canonization. The business reporter's prose soars to celestial heights, enshrining Maximum Bob as the savior of the American auto industry. Yea, verily, Maximum Bob single-handedly "seeks to redefine the automobile with the Chevy Volt." And lo, St. Lutz' road to Damascus was full of potholes. "When Lutz first proposed creating an electric car in 2003, the idea 'bombed' inside GM, he says. 'I got beaten down a number of times.' So in 2006, Lutz formed a skunkworks team of engineers and designers to quickly cobble together the Chevy Volt concept car, which became the star of the 2007 Detroit Auto Show." Cobbled? Ye of little faith!
"And then he persuaded the brass to greenlight the Volt for production by arguing that they must try to seize the green high ground from Toyota." Uh, I thought Lutz WAS the brass. Anyway, Naughton perpetuates the myth that the Volt will hit the market in 2010 and sell below $30k– a piece of PR prognostication that Maximum Bob has recently abandoned. Still, it's nice to know St. Bob's journalistic acolytes are still willing to make that leap of faith, even if he isn't.