Smells like… victory. Newsweek magazine had a chin wag with Chrysler's new Vice Chairman, eschewing genuine analysis for the lazy journalist's best friend (edited Q&A). Anyway, in case you were wondering why the former Toyota exec jumped ship, Press says "I like the smell of the sheet metal on the showroom floor." So a HUGE pile of cash had nothing to do with it, then. Other revelations: Chrysler products don't suck as much as people think, Press' new job is to get the company to "see the world through the customer’s eyes," Chrysler will eliminate some models AND add models that "extend our footprint," and Jimbo's up for any old alt powerplant ("You’ll have diesel hybrids. You’ve got fuel-cell hybrids. You’ve got all-electric cars that use a hybrid system. Plug-in hybrid."). Press finishes with a folksy flourish. "You know, it’s a simple business. There are dealers and there are products. We’ve got to build the right products and give the dealers good stuff to sell." Huh. I guess Press' heirs should be glad nobody told that to Daimler.

I like vanilla ice cream. I know: as a guy who chooses "media" from the drop-down menu of professions, I should be into something exotic like swordfish pecan or Quaaludes and cream. But vanilla has a Zen purity that appeals to my inner minimalist (which I can't find from time to time 'cause he's so damn small). In the same way you can discern an ice cream maker's skills by sampling his or her vanilla, you can tell an automaker's prowess by assessing the quality of their plain Jane models. That's one reason TTAC is proud to review cars at the lower trim levels. It also explains my satisfaction upon hearing that Justin's sending me his MINI Cooper [non S] review. And one of the unremarked but remarkable reasons for Toyota's success: the low end models don't make you yearn for the higher end stuff. Contrast this with Detroit, where "strippers" often seem carefully designed to make you spend more money on something significantly better. Which works fine IF you take the financial plunge. I mean, I can imagine there will be a lot of pistonheads sitting in a V6 Pontiac G8 spending every moment of the journey wanting the V8. If that's NOT true, then I'll take it as a sign of genuine progress. 

The New York Times may be called The Old Gray Lady, but I reckon it’s one of those old gray ladies you find lingering at lunch counters, constantly sticking their nose into everyone’s business. In today’s Op Ed piece, Thomas L Friedman takes Toyota to task. He's miffed that the Japanese automaker's siding with The Big 2.8 against proposed federal regs raising the required corporate average fuel economy (CAFE) figure to 35mpg by 2020. The arguments behind “Et tu Toyota?” may be old news to TTAC readers, but like the Times itself, we can’t resist a bit of nasty gossip.

“What is it about Michigan that seems to encourage assisted suicide? That is all I can think watching Michigan congressmen and senators, led by Representative John Dingell, doing their best imitations of Jack Kevorkian and once again trying to water down efforts by Congress to legislate improved mileage standards for Detroit in the latest draft energy bill.”

It’s not the most coherent of leads, but the point of Friedman’s opening salvo’s is clear: Detroit’s ongoing campaign to oppose radical changes to federal mileage standards works against the domestic automakers’ best interests. This shibboleth is not unknown in these parts: Detroit COULD meet higher fuel economy standards by building more miserly machines, but it CHOOSES not to. Instead, it CHEATS in Washington and then PAYS THE PENALTY.

You’d kinda think Friedman and his fellow Detroit bashers would be happy with this karmic payback. But no. ‘Cause that would make them anti-American. So Friedman says he "gets" pork barrel politics- but only if they work. 

“What I don’t get is empty-barrel politics — Michigan lawmakers year after year shielding Detroit from pressure to innovate on higher mileage standards, even though Detroit’s failure to sell more energy-efficient vehicles has clearly contributed to its brush with bankruptcy, its loss of market share to Toyota and Honda — whose fleets beat all U.S. automakers in fuel economy in 2007 — and its loss of jobs. G.M. today has 73,000 working U.A.W. members, compared with 225,000 a decade ago.”

Nope. In fact, you could argue that forcing The Big 2.8 to make [crap] small cars to average-out their fleet's fuel economy has hurt them more than Toyota and Honda ever could. But Friedman saves his biggest rhetorical blast for Toyota, whose decision to join Detroit in its opposition to the draft Senate energy bill puts ToMoCo beyond the pundit's pale.

“Now why would Toyota, which has used the Prius to brand itself as the greenest car company, pull such a stunt? Is it because Toyota wants to slow down innovation in Detroit on more energy efficient vehicles, which Toyota already dominates, while also keeping mileage room to build giant pickup trucks, like the Toyota Tundra, at the gas-guzzler end of the U.S. market?”

Although Toyota has not sold itself as the treehugger’s friend (they adopted the brand on their own), Friedman's got it half right. Obviously, Toyota is against the higher CAFE numbers because they wants to sell loads of "giant, gas-guzzling" (a.k.a. full-sized) pickups. But they're not supporting Detroit's position to gain a competitive advantage. If anything Toyota's trying to help Detroit stay in business– avoiding a US auto industry strengthened by Chapter 11 and/or a transplant backlash.

After quoting ToMoCo’s Prez’ declaration of support for higher fuel economy standards, Friedman counters with “the truth:”

“Not so fast. Here are the facts: Thanks to the Michigan delegation, U.S. mileage standards for passenger car fleets have been frozen at 27.5 miles per gallon since 1985. Light trucks are even worse.”

And there you have it: the crux of the matter. Friedman’s use of the word “worse” to describe the mandatory corporate average fuel economy for light trucks proves that he’s operating from the same position of simplistic ignorance that informs this whole “debate.” As far as environmentalists and their allies are concerned, the higher the required mileage, the better. Period. Anyone who dares suggest otherwise is a sleazy, money-grubbing planet killer.

It’s a shame that Friedman couldn’t move this debate on a bit like, I dunno, suggesting we scrap the whole CAFE system and put a big old tax on gas (if we must). But good governance is besides the point. Better to dredge-up the old “free market capitalism sucks” argument and be done with it.

“Hey, Toyota, if you are going to become the biggest U.S. automaker, could you at least bring to America your best practices — the ones that made you the world leader — instead of prolonging our worst practices? We have enough people helping us commit suicide.”

Friedman’s plea betrays the worst kind of American self-loathing. More to the point, the New York Times scribe believes that the regulatory framework surrounding the US automotive industry’s fuel efficiency standards is fundamentally flawed and inherently corrupt. In this we agree. 

[Read the full text of "Et tu Toyota" here.] 

Is Toyota trying to piss off the NRDC or prevent Michael Karesh at TrueDelta from expanding his exhaustively excellent vehicle spec data set to pickups? Anyway, Bloomberg reports ToMoCo's hoping to pick up even more pickup sales by offering the '08 Tundra in 44 different flavors. (Triskaidekaphobics note: that's 13 more versions than the '07 model offered.) Their main push: the work truck market. The Japanese automaker (by way of Texas) hopes that offering "Tundra Grade" (decontented) versions of the DoubleCab and CrewMax will help it carve a slice of the $23 – 28K full-size pickup pie, which accounts for 25 percent of the overall market. But you have to wonder if the lower-priced Tundra will eat into Tacoma territory. Meanwhile, Tundra sales are up 58 percent so far in 2007, getting them within striking range of their goal of a 60 percent increase this year.

Hot on the heels of a New York Times Op Ed piece taking Toyota to task for its stance on new federal fuel economy regs, The Detroit Free Press reports that the National [sic] Resource Defense Council (NRDC) has bombarded Toyota with 8100 emails, accusing them of fraternizing with the enemy. The environmental pressure group is plenty pissed that the Japanese automaker has joined The Big 2.8's opposition to the Senate's proposed 35 mile-per-gallon corporate average fuel economy standard. Although ToMoCo's cars already average over 32 mpg under the federal rules, the automaker wants to move them V8 Tundras. They share Detroit's fear that lawmakers will lump cars and trucks together for future averages. The NRDC doesn't give a you-know-what. "They're out there with their green halo justifiably touting their technology with the Prius," the NRDC statement says, throwing Toyota a bone. "The question is why the inconsistency in terms of their issues on policy." Toyota's Open Road blog attemps to answer that question: "You can't bankrupt the industry if you want it to invest in our environmental future." Hang on; did Toyota just use the "B" word?

GM's Swedish [in appearance only] division has decided it needs to take on the BMW-1 series and Audi A3 with a brand new model in 2010. Hoping to get a 9-1 with the Swede's slick AWD? Nej. Teknikensvarld.se reports the plan: compete with the German bad boys with a pair of hybrid engines stuffed into an Opel Astra with a Saab logo stuck on. True to their latest tune, GM has planned a conventional hybrid and a plug-in hybrid, and of course Lithium-Ion batteries are also being suggested. No word yet as to how GM [may] have managed to get Lithium batteries to work when Toyota is still adopting a "wait and develop" strategy. Also no word on what the 9-1 looks like, other than the fact that it will take styling cues from the Saab Aero X (pictured). Let's just hope that styling cue thing works out a bit better than it did in the 9-2x and 9-7x. 

GM’s decline began fifty years ago, when the domestic automaker failed to repel import sales with competitive products. GM’s rear-engined air-cooled Corvair provided the template: technically advanced, but too expensive to provide profit. A string of over-ambitious and ultimately doomed imports fighters followed: aluminum-engined Vega, the Wankel, X-Body FWD, Olds Diesel V8, Cadillac V8-6-4 and EV-1. Now, when it can least afford a costly mistake, GM is launching a blitz of four different hybrid systems in a desperate attempt to counter Toyota’s successful Hybrid Synergy Drive (HSD). Is GM’s Volt the Corvair reincarnated?

Toyota’s ascendancy has been well documented: the tortoise approach to continuously improved products, processes and technologies. The Prius was born in the early nineties when oil was $15 a barrel. Initially subsidized by Toyota, the Prius is now a profitable product. And Toyota continues to relentlessly wring-out the costs of HSD; the Japanese automaker expects its hybrids to have the same (high) profit margins as its conventional cars by 2010.

Instead of figuring out how to make its (conventional) small cars profitably, GM has opened the floodgates to hybrid development. In fall ’06, Saturn introduced the belt-assist (BAS) or “mild hybrid” Saturn Vue. While GM’s BAS system allowed the domestic automaker to crow that it was, finally, in the hybrid business, sales are… unknown. [GM is the only automaker that doesn’t to break out hybrid sales numbers.]  

The two-mode hybrid system set to be introduced on the Chevrolet Tahoe and GMC Yukon is classic GM: a technically ambitious product that costs too much money. GM has publicly stated that the two-mode costs the company $10k. Try amortizing that with three dollar gas; it just doesn’t pan out. No surprise that development partners Daimler and BMW are quietly walking away from the two-mode in favor of their own cheaper partial-hybrid systems. Even using six bucks a gallon gas, Europeans can’t justify the extra investment.

GM will sell a few thousand hybrid Tahoes and Suburbans to politicians, celebrities and the like, so they can ride in their behemoths “guilt free.” Meanwhile, GM is rushing their new light-truck diesel to market. The oil burner’s a better and cheaper choice for the real world conditions in which pickups and SUV’s operate (highway mileage improvement of the hybrid Tahoe is all of 2 mpg). And just who’s going to buy a Chevrolet Malibu with a $10k two-mode hybrid system?

Now, “plug-in hybrids” have replaced the fuel cell as the eco-darling concept du jour. GM has no fewer than two such systems in development. A plug-in version of the Vue could well end up costing $45k ($6 to $10k on top of the $10k cost of the two-mode system).

And then there’s the Volt. According to GM’s Bob Lutz, “Five years from now there will be one technology leader in the world, and it will be GM.” That boast has a familiar ring to it. And even if it turns out to be true, it will be a hollow (i.e. unprofitable) victory.

GM is sending its series-hybrid Volt to a showdown at the ECO corral against the parallel-hybrid Prius. With its projected 40 miles plug-in range and on-board generator, the Volt sounds impressive. But the Gen3 Prius due out in 2010 (like the Volt?), may well equal and even eclipse the Volt’s efficiency.

The Volt’s weakness– intrinsic drive train inefficiencies– show up as soon as its battery range is exhausted. While GM projects 50mpg during “charge sustaining operation” operation, that’s a misleading claim. The batteries will need to be charged by the generator– as well as keeping the car moving. Like all electric vehicles, the Volt will do best in shorter-range city driving.

The Prius’ HSD drive feeds the output of its gas engine directly to the wheels at higher speeds. It’s an intrinsically more efficient solution than using a generator to send power to an electric motor via the batteries. And Gen3 Prius will easily meet or exceed the Volt’s 50mpg continuous-use projection; Toyota projects a 15 to 20 percent improvement over the Prius’ current 46mpg EPA rating. Gen3 Prius will also have expanded electric-only range, as well as an optional plug-in range extender, approaching the Volt’s electric-only range.

GM will milk all the publicity it can get from the Volt. Hard-core eco-poseurs will buy in. After spending a billion dollars developing the Volt, they’re looking to sell some 60k annually at $30k apiece.  GM is anxious about that price, and is already floating the idea of renting the battery pack separately from the car (negating any actual savings from plug-in electric energy) to try to blunt the impact (“We’ll sell you a Volt for $20k, battery not included”).  

Meanwhile, Toyota will be selling 150k similarly-efficient Prii for a mere $20k, and making a tidy profit doing so. 

The Alliance of Automobile Manufacturers (AAM) represents a strange agglomeration: BMW, Chrysler, Ford, General Motors, Mazda, Mitsubishi, Porsche, Toyota and Volkswagen. Getting all nine members to agree to any given PR plan must be Hell on Earth. And yet, as any Star Wars fan will tell you, you can't be a proper Alliance if you just hang around waiting for the Death Star to appear. For Death Star, read the federal government, which has emerged as the single most important force in the American auto industry. Anyway, someone at the AAM got their members to fund a new website called YourMileageMayVary.com. The site tells consumers all about the new EPA fuel economy stickers. It's a terrific little corner of cyberspace: concise, user-friendly and useful. There's nothing controversial here– other than the fact that the tax-payer funded EPA couldn't do it nearly as well. But it's definitely geared towards the intellectually challenged. In the Q & A bit: "How effect will the new labels have on the cost of a fill-up?" Answer: "These updated estimates are about updated information for American drivers, not worse fuel economy." Glad we got that straightened out.

The EPA has just released its summary of the model year 2007 composite fuel economy ratings by manufacturer (or, in EPA-speak, "marketing group"). The average for all manufacturers was 20.2 mpg– no thanks to the SUV/truck-centric Big 2.8. Honda led the pack with an average of 22.9 mpg, squeaking by Toyota at 22.8 mpg. The other manufacturers slotting in above the industry average: Hyundai/Kia (22.7), VW (21.4), and Nissan (20.6). Falling below the average were GM (19.4), Ford (18.7) and DaimlerChrysler (18.3). GM has never managed to exceed the average, but they tied it three times, the last time in 1998 (20.1). Pre-Daimler Chrysler last placed above the average in 1984, bettering the 21.0 average by 0.1 mpg. Ford has never placed above the average; Toyota and Honda have never been below it. Click here for a graph showing a side-by-side comparison of the 2007 results.

Clearly, nothing about the United Auto Workers (UAW) proposed contract with GM is clear. Until we see the precise details, the agreement's ramifications are unknown and unknowable. Meanwhile, you'd expect the media to hang fire. Yeah right. "For GM, deal is a game changer" proclaims the Globe and Mail. "GM Labor Deal Ushers In New Era for Auto Industry" the Wall Street Journal advises. "Deal gives GM cash to build better cars" predicts The Detroit Free Press. Scanning these Pollyanna prognostications, the Freep provides the greatest insight. Not because I believe a word of Mark Phelan's thesis. Because I don't.

I reckon the UAW's new contract will not deliver one dime of short-term savings to GM. If anything, it will add to their overheads– especially the interest on the money that will pay for the multi-billion dollar union-controlled VEBA health care superfund). This has been the pattern since GM CEO Rick Wagoner started his campaign to trim his employer's overheads to match their falling income. Wagoner announces plant closures and union buyouts that transfer costs from now to later. Why would this new contract be any different? As Frank Williams pointed-out, the contract calls for a "targeted special attrition program" for "non-core workers."

But let's assume Phelan's giant leap of faith is correct and [for reasons I can't possibly fathom] this new contract reduces GM's labor costs by $2k per car produced (presuming GM's output hasn't declined further since he wrote the piece). Is the scribe right to suggest that GM would– sorry, "will" use the extra cash to build better cars? Could this really be a turning point, where GM rides to glory on the back of a product renaissance? In a word, no.

In any discussion about GM's future, you have to consider the unavoidable truism that you can't fix stupid. In other words, no matter how much more money GM spends on improving its products, it runs the [usual] risk of spending the "extra" money on the wrong cars, in the wrong way, with little of nothing to show for it. When it comes to creating competitive product, financial resources are key. But a coherent strategy is more important. And a healthy corporate culture is the most important element of all. In this case, one out of three sucks. To wit:

Building a down market Caddy is stupid. Selling two different versions of the same CUV in the same dealership (Buick Enclave, GMC Acadia) is absurd. Rebadging a Chevy Trailblazer as a SAAB 9-7x is dumb. Sticking a $65k Corvette next to a $13k Aveo in a Chevy showroom is idiotic. Building a Corvette-engined folding hardtop pickup truck (SSR) is seriously misguided. Letting the Pontiac Grand Prix rot on the vine for a decade is asinine. Selling better Buicks in China than the US is ridiculous. And so on.

Now you could posit that these mistakes are somehow cost-related. And you'd be wrong. An extra $2k lavished on any of these vehicles would not have corrected the underlying strategic blunders that led to their realization. As Phelan himself points out, the fact that GM could sell the new, improved Cadillac CTS for the same price as the previous model puts paid to the "we don't have enough money to build competitive models" argument.

We've spoken before about the all-conquering corrosiveness of GM's multi-divisional corporate culture. The automaker is a labyrinth of beancounters and middle managers whose interdepartmental skills make Kafka's nightmarish bureaucracy seem like a well-run America's Cup team. It's important to realize that this kind of diseased corporate culture spends resources with all the efficiency and effectiveness of a government agency.

When I moved to the UK, the Labor party had the same answer for every problem: more money. When they assumed power, they raised taxes and spent the money. And… nothing. Anyone who holds the belief that an extra billion or two or five pumped into GM's stultified product development process will be a "game changer" is sorely mistaken. The money would– sorry, "will" disappear down the same rat hole that currently swallows GM's development cash and produces substandard, bone-headed products.

Fortunately, not all journalists are lining-up at the GM water cooler to drink the company's Kool-Aid. Like many TTAC commentators, some news outlets are pointing out that GM CEO Rick Wagoner's post-strike comment– "This agreement helps us close the fundamental competitive gaps that exist in our business"– finally puts his ass on the line. By his own admission, Wagoner can no longer point to labor costs as the weights around GM's ankles preventing it from running with (ahead of?) the Toyotas, Hondas and Nissans of the world.

Yes, well, there's still Japanese currency manipulation, the mortgage crisis, a general economic downturn and all the other excuses the company has been trotting-out since GM found itself having to explain why its indeterminate turnaround plan has failed to gain traction. Look for more of the same.

Well exactly. GM's new union contract– if ratified– will not save the automaker from its fundamental weaknesses. Going forward, in 2008, GM will be in for a long, tough slog, warmed only by its own cash conflagration. During this time, GM's labor costs will not come down dramatically, its health costs will not be reined in and its Hail Mary products won't save its soul.

The International Trade Commission has ruled that Toyota did not pilfer key technology from Solomon Technologies to create the Synergy Drive system used in ToMoCo's hybrids. Solomon CEO Gary G. Brandt is undaunted. "We believe the ITC made serious errors in interpreting the pertinent patent law and precedents in this case and as we have reviewed the case transcripts more fully we are even more convinced that we will eventually prevail." Speaking to TTAC [below] Brandt says his company had "numerous documented meetings" with Toyota prior to the release of the Japanese automaker's hybrid system. What's more, since the Prius was released, Toyota has licensed [what Brandt claims to be] Solomon technology to Ford. The legal action continues. Meanwhile, Solomon has posted an animation on their website highlighting the similarities between the two systems.

Auto Motor und Sport (via Just-auto [sub]) reports that Toyota is withdrawing the Land Cruiser from their Eurozone dealerships after this model year. The move comes as ToMoCo seeks to trim its entire fleet's CO2 averages to 140g per kilometer, as per voluntary European Union (EU) regulations. As the heavyweight SUV wasn't exactly a stellar seller and a new, more environmentally friendly Land Crusher Cruiser is about to debut, it's no biggie. More interestingly, Toyota plans to increase the price of their hot-selling, recently redesigned RAV4 in order to curtail demand– and meet the CO2 target. The changes to Toyota's lineup illustrate the difficulty faced by smaller manufacturers like Porsche, who don't sell low CO2 machines that "average out" their gas guzzlers' emissions. Hence German manufacturers' campaign to get the EU to set CO2 limits based on vehicle size, rather than fleet averages. Just-auto figures that idea's a non-starter. Next question: can a brand under a corporate umbrella (i.e. Volkswagen's Bugatti) rely on the meta-group's high mileage cars to meet the regs? And even if they can, will the detrimental effect on the larger brand encourage the corporate mothership to jettison the CO2-spewing boutique brands?

Prius/hybrid bashers have a new angle of attack, thanks to Cardiff University and UK automotive consultancy Clifford Thames (who currently features Toyota's logo on its website). The Financial Times reports that the dynamic duo studied a range of vehicles and concluded that many conventional petrol or diesel engined machines (e.g. the Mini Cooper D diesel hatchback and Fiat Panda) are "greener" than the gas – electric Prius. How's that then? "The Cardiff/Clifford Thames ranking gave CO2, nitrogen oxide and other emissions a 50 per cent weighting in assessing cars’ overall environmental friendliness. For the other 50 per cent, it ranked vehicles on their construction, energy and end-of-life costs, based on their length, width and weight." We'd like to see a  bit more detail on that formula. Meanwhile the study's author was aware that their results were a bit, um, skewed. “We’re not saying that any car that is the same size as the Prius is better," Clifford Thames’ Richard Barber admitted. "but the gap is closing very rapidly, and conventional technologies will pass the Prius." In fact, “Conventional technology will overtake the Prius over the next 12 to 18 months, and consumers won’t have to pay a premium for it,” said David Riemenschneider, Clifford Thames’ chief executive. Let the eco-games begin! Oh wait; they already have.

After more than a week of overtime negotiations, the United Auto Workers (UAW) is on strike at General Motors. For those who think this action signals the beginning of the end for The General: yes and no. On the yes side, the strike will highlight the original sins that led both sides to this point. The executive greed and mismanagement. The union intransigence and denial. The strike will alert the dim-witted media that the Emperor hasn’t been wearing any clothes for decades, ding GM's rep, and make it even more difficult for the carmaker to sell cars. On the no side, GM will settle. A compromise will be reached. The same players will resume the game, poorer but no wiser.

The strike stems from one simple fact: the UAW is unwilling to take a hit for the team. As I’ve stated many times, trade unions are not in the business of surrendering wages, benefits or working conditions. It’s not in their nature. All the previous UAW “givebacks”– which supposedly signaled the union’s willingness to sacrifice for the good of the company– were nothing of the sort. They were payoffs. You want us to give up jobs? Create an attrition program. You want to increase our health care co-pays? Stick $2b in the bank. The UAW puts the “pro” in quid pro quo.

Can you really blame the UAW for holding fast to this "you'll get what you pay for" philosophy? Sure, analysts and media pundits have been bleating on about the need for GM to trim its labor costs to keep pace with their non-union competition. But how can a union member be expected to make a sacrifice when the company’s top players are paying themselves tens of millions of dollars in salary and bonuses? Do as I say, not as I do? I don’t think so.

GM went into these negotiations determined to create a $51b union-administered VEBA health care superfund. As always, the UAW was listening to WIIFM (What’s In It For Me?). You want to dump your health care liabilities on us? Show me the money. Not 65 cents on a dollar. Not 50 percent stock, 50 percent cash. A $51b health care VEBA will cost you… $51b. And while we’re at it, let’s have some job guarantees and a nice fat signing bonus.

The fact that GM didn’t give the union what it wanted has nothing to do with testicular fortitude. If GM had the money to cut the deal, they would have cut the deal. But they don’t, so they didn’t. Ten or twenty years ago, GM could have written a check or, at the least, rung-up a few bankers and arranged favorable financing. No more. Cash-wise, Forbes says they're sitting on $32b. Take off a $10b float, add up their ongoing liabilities, consider the cost of borrowing $51b and it's no wonder the VEBA was a stock-heavy deal. Or that the union walked. 

Which leaves us here: either GM will borrow the “extra” money at usurious rates to establish their beloved VEBA and settle the strike, or they’ll dump the VEBA and settle the strike with a new wage structure and working conditions. That's provided GM has the money to pay off the union for these “givebacks.” If GM can't pay the freight for ANY changes in the UAW's wages, benefits or working rules, they’ve either got to keep on paying the current rate plus a little bit ‘mo (‘cause there’s always a little bit ‘mo) or go nuclear: sit it out, file chapter 11 and hit reset.

Again, in all likelihood, GM will cave. Just as the UAW never surrenders, GM never stares them down. Meanwhile, the UAW strike is pouring gas on GM's cash conflagration. The UAW's 53-day, 9200 worker strike against GM in 1998 cost the automaker an estimated $2b or roughly $37m a day. This time 'round, 73k UAW members are on strike. This industrial action could cost GM as much as $300m per day. At that rate, GM's entire cash pile would be gone in 106 days. What's more, if GM is too cash-strapped to buy off the union now, what hope will there be in a month or more?

At the same time, the more GM publicly justifies its negotiating position– we can't keep up with the Toyotas of the world with our sky-high UAW labor costs– the more people will hear "GM can't compete." And that story renders GM's PR narrative– our house is now in order and we're on the cusp of a major product-led renaissance– meaningless. In fact, with each passing day of this strike, GM will look more and more like what it is: an old-fashioned, incompetent, easily-distracted automaker caught flat-footed by its modern, focused, streamlined, non-union competition. 

Toyota is expanding its car insurance business into the world's second largest country (by area). “If everything goes well, we want to [offer policies] within a year,” Toyota Canada's president and CEO told ReportonBusiness. The automaker already sells auto insurance in Asia, Europe and Australia. University of Calgary prof Ryan Lee is good with the expansion. Ish. “Having the ability to sell insurance through an existing dealership network would give an auto maker a major advantage at the outset; however it is not clear to what extent such a move would shake up the market.” Toyota has also set its sights on the retail banking industry. ToMoCo has a bank in Poland and recently opened ZAO Toyota Bank in Moscow. In the U.S., Toyota Financial Services offers everything from mortgages to savings accounts from its offices in Henderson, NV. The juggernaut rolls on.