Auto industry analysts have cast their beady eyes on The Blue Oval's third turnaround plan, and they don’t like what they see. Despite the fact that Billy and Alan and Mark have mashed the gas on Ford’s downsizing, there are ominous rumblings that the cuts aren’t deep enough. The assertion is almost as shocking as the cuts themselves. If asking all of your 75k union workers to piss off isn’t enough, if shuttering sixteen plants doesn’t cut the financial mustard, well, is there any end to this death spiral?  Only the obvious one.

To review: Ford wants to jettison 30k members of the United Auto Workers (UAW). The analysts are saying it ain’t gonna happen dot bomb. FoMoCo’s assembly liners are younger than GM’s. Ford’s $140k lump sum payoff offer matches The General’s, but Ford workers’ relative immaturity means their pensions would be significantly smaller. Some analysts are predicting that Ford will fall short of its workers-out-the-door goal by 10k union members– raising the specter of yet more deposits into Ford’s infamous money-for-nothing jobs bank.  

But that’s not what’s preoccupying prognosticating pundits. They’re concerned that Ford hasn’t named the final two factories they plan on shuttering. While this website has attributed Ford’s secrecy on this matter to political concerns (i.e. not pissing off friendly pols in whose districts the axe will fall), the rest of the crystal ball set see it differently. They consider the mystery a reflection of confusion, indecision and poor product planning (i.e. business as usual). In other words, if you don’t know what you need to build, you don’t know what not to build and where you shouldn’t be building it.

Addressing the topic in Automotive News, Catherine Madden, senior analyst at Global Insight, left her word mincer at home. "This indicates that Ford doesn't have a clear handle on what their product plan strategy is beyond 2008." Analyst Glenn Mercer was equally forthright: "The implication is that they haven't really figured this out yet, and if that's the case, one has to wonder what they have been doing for the past six months — or six years."

These number crunchers reckon that Ford’s production cutbacks will peg the company’s capacity utilization (actual output vs. potential output) at 84%. That would leave The Blue Oval Boys with excess production capacity equal to 500k units. That’s not good; Ford has to pay for this unused, unprofitable potential. Ford spokesman Oscar Suris’ counter: we’re getting there. In fact, if we hit 100% capacity utilization any sooner than our new new 2010 target date, we’ll have to surrender sales and/or invest in costly retooling.

Surrender sales, indeed. The industry analysts' calculations are based on Ford’s projection that it’ll capture 14% of next year’s domestic car market. If they don’t hit that target, even the 84% utilization figure will look like wishful thinking, and the automaker's profitability by '09 pledge will have as much credibility as cold fusion.

Obviously, it all comes down to product. According to Ford execs, the company’s got the goods to hold the fort, and maybe even fight a skirmish or two. They put tremendous stock in the $26k Edge. But back when the Mercury Montego (a badge engineered Ford 500) was launched, John Fitzpatrick predicted "We expect to conquest about 40 percent, meaning 40 percent of our Montego customers will be people who are outside the Ford family right now." 

It didn't happen, but it must, and soon. In order to survive, Ford must lure non-Ford buyers into the fold. Although the media quite rightly focuses on the need for Ford to build gotta have products, the window of opportunity may already be shut. Think of it this way: Toyota, Honda, Nissan et al. didn’t establish segment dominance simply by building good products. They built good products in segments where American cars sucked. Now that the shoe is on the other foot, it’s worth noting that the so-called imports’ products don’t suck.

Perhaps there is merit to this whole “Bold Moves” thing. It seems pretty clear that Ford no longer has enough cash/time to make the incremental changes that could gradually win it enough business to stay in business. Maybe it’s time for the Blue Oval to do a Walt Disney: bet the whole company on a radical new product. Ford has a long history of creating exciting concept cars; cars that could legitimately be called segment busters. Who was it that said history is bunk? Screw the past. Build some weird shit. If we heard about some bold moves on the new product front, we’d have reason to hope. But we don’t, so we don’t.    

Ford’s in trouble. Headlines talks of cuts, cuts and more cuts; and new product that might bring the automaker back from the brink. Meanwhile, mad props are in order for the party responsible for not killing the venerable Lincoln Town Car. This website has long argued that Ford’s failing car business isn’t about new product. It’s about neglecting existing product. Whether or not a resurrected Town Car aids an ailing FoMoCo is an open question, but refraining from reinventing the wheel at every regime change is the short answer.

Another day, another turnaround plan. For those of you keeping score, Ford’s “Way Forward 2.0” is actually the third version in four years. In terms of strategy, the new, new plan holds few surprises; FoMoCo is simply super sizing their right-sizing program. On the credit side of the ledger… nothing much. New models still won’t hit the streets anytime soon. But the Street has hit Ford. On “Blue Friday,” Ford’s stock shed nearly 12% or $2b of its value. Investors and pundits alike are finally waking up to the fact that America’s number three automaker is in triage, with the crash cart standing by.

The latest round of surgery brings new meaning to the word “invasive.” The United Auto Workers (UAW) rank and file face the deepest cuts: all of union leader Bob King’s 75k plus brothers and sisters will be optioned. Ford hopes that between twenty-five and thirty thousand punch card people will accept one of eight offerings— involving various combinations of lump sum payouts, tuition breaks and health insurance. Employees have until November 27 to sign-up and sign out. All takers must be out the door by September.

The cuts reflect an increase in plant closings and “idlings,” from 14 to 16. The company has identified nine plants it’ll axe in 2008: Atlanta Assembly (Ford Taurus, 2028 workers), Batavia Transmission (1445 workers), Essex Engine Plant (695 workers), Maumee Stamping Plant (680 workers), Norfolk Assembly (F-150, 2433 workers), St. Louis Assembly (Explorer, Aviator, Mountaineer, 1445 workers), Twin Cities Assembly (Ranger, B-Series, 1866 workers), Windsor Casting (522 workers) and Wixom Assembly (Lincoln Town Car, 1259 workers). Sensitive to upcoming elections, Ford refuses to name the five other plants set for closure.

At the same time, fourteen thousand white collar Glass House inhabitants are due for defenestration. Ford figures all the cuts will save the company $5b annually. For now, the buyouts will burn through roughly $7b– in ‘07 alone. At the end of this, Ford reckons it will produce 3.6m units. That would slice FoMoCo’s share of the domestic auto industry pie to somewhere between 14 and 15 percent. Even at this new sub-Toyota size, even with lowered overheads, Ford will still have to score some major new product homeruns to meet their new goal: profitability by ‘09.

That’s going to be tough. The lost market share has gone to the competition. Despite announcing that 70% of Ford, Lincoln and Mercury “products by volume” will soon be new or upgraded, other than the cross boarder crossovers already on their way, Ford’s product pipeline looks decidedly dry. More Mustang variants, re-dubbed F-150’s, a V6 Lincoln flagship and a full-size people-carrying CUV are the only short term prospects. Two of these erstwhile saviors are niche vehicles and another contributes to the shrinking market that led to this debacle. The boxy (bold?) people mover will have its work cut out for it; Honda and DCX’s refreshed minivans are just around the corner.

Despite assurances that Ford will finish the year with $20b in the hopper, roughly half of those funds go to daily operating expenses. Just like GM, cash crunch time is coming. Blue Friday’s revelation that the formerly flush company is eliminating its stock dividend, saving $400m, indicates that liquidity has become a worry. Although Ford insists that none of the members of the Premium Automotive Group are up for sale, they are. Although the company claims it won’t sell a stake in Ford Motor Credit Co., it will. Bailed out parts supplier Visteon is also being cut loose.  And FoMoCo will try to off-load 23 pieces of real estate it acquired last year.

It’s no wonder Billy's Boyz are still in surgery. Their previous doctoring was either too little, too late or too little too late. With the UAW’s inflexibility over at Chrysler and contract negotiations starting next year, it will be a long time before the patient will be stabilized– never mind cured. But the really scary part is that Billy Ford is still large and in charge, leading the Way Fordward. CEO Alan Mulally, who started collecting his gigantic paycheck last week, took a back seat during the press briefings. Mulally's contribution: "They are really trying to look through clear glasses and deal with our industry's reality." Oy they.

There is but one bright spark of hope in all this. Ford has decided not to kill the venerable, well-loved Lincoln Town Car. Could it be that someone in the increasingly-less-vast Ford Empire realized that if so many good products hadn’t been left to whither on the vine (Town Car, Focus, Taurus), if there had been some genuine fordward thinking, FoMoCo wouldn’t be desperately chasing lost market share in crowded segments? It may be a piercing glimpse into the obvious, but when you’re chasing anything, you’re always playing catch-up.

Did GM buy a piece of Moller International? The General’s recent TV commercials show its full product range rising off traffic-choked roadways and flying off at tremendous speeds. You can almost hear the Skycar's inventor slapping his thigh and yelling “Now THAT’S what I’m talking about!” Of course, that’s not what GM’s talking about. They’re touting their new five-year, 100k mile warranty. Notice I didn’t say “powertrain.” Neither do the ads, which leave viewers with the impression that GM’s products come with five-year, 100k mile bumper-to-bumper protection. Talk about sins of omission…

Let’s be clear about this. A five-year 100k mile bumper-to-bumper warranty would have been big news. GM’s powertrain warranty only assures buyers that the parts that are least likely to break won’t break. It says GM will fix these parts that shouldn’t break without charge and pick you up from the side of the road for free, should one of the parts that shouldn't break breaks and leaves you stranded. Hang on; is this really a major selling point? And doesn't The General have enough trouble moving the metal without trying to invade Toyota’s turf? Toyota has a twenty-year head start in the reliability business; GM doesn’t have twenty years to catch up.

In his official statement, GM CEO Rick Wagoner asserted that the new powertrain warranty “provides GM customers with an unprecedented level of value and peace of mind.” First and most nit-pickingly, the release specifically refers to “GM customers” rather than “new car buyers.” So, forget conquest sales; just make sure that GM loyalists are happy– er. Considering the automaker’s inexorable market share slide, now reduced to an ironically proclaimed “one out of every four cars sold in America,” Rabid Rick's decision to use a powertrain warranty to recapture lost buyers is, at best, ill-advised and overly optimistic.

Second, Rabid Rick's attempt to stake his company's claim as builder of “value” automobiles thrusts a stake through the heart of its business. Last year’s “Fire Sale for Everyone” program K-Martified the company within the pubic consciousness. Continuing down that road places GM into the worst possible market position: more expensive than the cheapest and less desireable than the best. As an automaker with labor and legacy costs larger than Belize’s GNP, GM can't do cheap (at least not without shipping all the work to South Korea). Going for value– rather than focusing on desirability– makes GM vulnerable from all sides. 

And lastly, GM’s attempt to sell its cars based on “peace of mind” is laughable. Again, Toyota owns that mental space. If you widen the concept to include the single largest cost of car ownership– depreciation– Honda kicks GM’s peace-of-mind ass all day long. More to the point, Eric Hirshberg’s claim that his agency’s “Elevate” campaign proves that GM “shed the baggage and went on offense” is just plain wrong. Saying your product doesn’t suck is not the same as saying its better than the other guy’s. And if GM’s vehicles aren’t better than the other guy’s, well, it’s no wonder they’re talking about value for money and warranties.  

Of course, it’s hard to see where GM could go these days. In the 40’s, 50’s and early 60’s, GM offered some of the most innovative automobiles in the market, if not the entire world. At the same time, Harley Earl’s sheetmetal captured the hopes and dreams of a nation. While there are some standout niche products in GM’s gi-normous portfolio, the gotta have is gone. The vast majority of GM’s products are… generic. Bland. Boring. Vapid. Unrefined. Uncompetitive. They may not break your heart, but neither do they capture it.

Say what you will about the styling and driving dynamics of a bread-and-butter Corolla, Camry, Accord, Fit, Yaris, etc. Their owners love their cars. (And not just because they’re reliable.) Obviously, GM loyalists also love their motors. But the market share says it all: the so-called imports are winning the campaign for US car buyers’ hearts and minds. Concentrating on the “minds” part of the equation with a new warranty puts the cart before the horse. It’s preaching to the converted. It simply won’t work.

Rest assured, the reckoning is coming. The situation over at bankrupt auto parts supplier Delphi remains unresolved. The UAW is flexing its muscles over at Chrysler, while Delphi’s creditor committee breathes down Call Me Steve Miller’s executive neck and a federal judge's seemingly infinite extensions (on the company’s motion to throw out its union contracts) aren’t. The pickup market, upon which Rabid Rick says his company’s immediate future depends, has tanked so badly that Toyota is scaling back production of its next generation Tundra by a third. Meanwhile, here’s a simple question. If GM could make vehicles that lasted forever, would that be a blessing or a curse?

Servicing my Corvette is only marginally more pleasurable than filling out my tax return. First, I stand around the service desk waiting for a bleary-eyed “advisor” to acknowledge my existence. Then the employee asks if I want to wait for my car or… if someone’s picking me up. If I hang fire, I’m confined to a waiting room with all the charm of a correctional facility. If I leave, I have to call to see if the job’s done. When I pick up my ‘Vette, previous experience has taught me to inspect it for familiar desecrations– oily boot marks, additional miles, changed radio stations, etc. Oh, and to make sure the job’s actually been done. Sound familiar?

If not for warranty work, many of us would never darken the driveway of a franchised dealer’s service department. Service advisors may know plenty about the vehicles they handle– note: may— but the vast majority of them are number takers, not friendly automotive experts ready to discuss the finer points of maintaining your pride and joy. They’re more interested in trying to sell you an additional service. (Would you like us to fill your tires with nitrogen?) And once your second largest financial purchase disappears into the bowels of the service department, the advisor has no clue what’s happening to it. Nor do they care. They’ve moved on to their next victim.

Most of the time, you have no idea who’s working on your car or their experience level. You never see or talk to the mechanic– which means they’re never held directly accountable to the customer for anything they’ve done, or explain problem areas that need watching/budgeting. If they screw up, the service department’s rigid appointment system prevents them from correcting it on the spot. You have to make yet another appointment for yet another trip for yet more aggravation.

Bad service is not an “import vs. domestic” issue. The problem’s spread right across the automotive spectrum. As part of their ongoing effort to play headmaster to the entire car industry, JD Power rates after sale service. Setting aside questions about JD’s methodology and independence, the company’s data yields some surprising results. Toyota consistently rates near the top in Power’s Initial Quality Survey. The automaker sits in the bottom third in customer service satisfaction. Cadillac and Buick dealers are just below Lexus at the top. Customers more easily pleased? Better service? Who knows? Generally speaking, there’s no correlation between a car’s purchase price or country of origin and the level of service customers receive afterwards.

In this age of internet-delivered purchase price transparency, the service and parts departments account a large and growing percentage of a dealership’s total profit. So why is service the dealer department where customers consistently receive the worst overall treatment? After all, service departments that treat their customers like second class citizens degrade the dealer's ability to sell those selfsame customers another car.

It doesn't have to be that way. Wouldn’t it be nice to be greeted by name when you arrive for service? To be treated like an intelligent human instead of a total idiot? To find a clean, cheerful waiting room with current magazines and fresh coffee? Why don’t all service departments provide their customers with a loaner car of equivalent quality (or better) than the car they drive in? At the very least, where’s my damn courtesy ride?  And I don’t mean a 15-passenger van driven by the dealership’s village idiot. I mean a personalized car service that gets you to your destination as quickly, comfortably and safely as possible.

With all of today’s new technology, how much effort would it take for a service advisor to provide you with a progress report by phone, email, IM or pager (if Friday’s can give out pagers…)? How about a webcam on the service bay, so I can watch repairs from the comfort of my office? Or a report card, listing what parts may be due for service in the future? Or a private computer with internet access while I wait? Why can’t service departments go the extra mile to surprise and delight their paying customers?

No, I haven’t ingested hallucinogens. My wife’s Audi dealer’s service department treats us like valued customers. They provide clean loaners cars. They call  during the day to let me know how work is progressing. When I pick up her car, I get a full report on what’s been done, what parts were used and what it cost. The repaired car is right out front, freshly washed, ready to go. It doesn’t take a rocket scientist to figure out where I’ll go the next time I’m in the market for a new car. My experience with this dealership proves good customer service is possible. My question is: why isn’t everyone doing it? 

Once again, the queen of motor sports is in transition. Big, well-funded manufacturer teams– Ferrari, Mercedes, BMW, Renault and (yes) Toyota, etc.– are doing a Reagan: spending their less well-funded opponents into oblivion. To wit: Jordan, Minardi and (yes) Jaguar are no more. This creeping consolidation will certainly fuel the anger of those fans who’ve long claimed that big business is killing F1’s spirit. While it’s sad to see the privateers leave the circus after decades of noble competition, F1’s commercialization is actually good news. It will lead to a more engaging and closer battle between the teams.

The manufacturers’ motivation is stronger than the smaller independent teams’. A Mercedes racecar that suffers constant reliability problems will negatively reinforce the connection to the brand— an association that Mercedes doesn’t need and can’t afford. A Renault that can beat a Ferrari adds luster to the French brand, stimulating the patriotism upon which the automaker depends. The stakes are higher than mere trophies on a shelf, as F-1 becomes a showcase of a brand's image, for good or worse.

Toyota, who made their team from scratch (as is their style in such things), is throwing billions of dollars into the game, looking for a championship to burnish their reputation for quality and reliability. BMW, who bought Sauber when Williams couldn’t get the job done, want to have the ultimate driving machine in the ultimate sporting arena. Honda, although it has a very successful past in F-1 with McLaren and BAR, now needs to prove that a Honda can earn the ultimate accolade. Again, Mercedes purchase of the McLaren team shows their full-on commitment to set a world standard on a world stage.

In recent years, Ferrari has dominated F1. Their excellent engineers, drivers and teamwork have brought the marque well-deserved glory. But anyone who follows the sport closely knows that Ferrari also has a strong hand behind-the-scenes. This year’s FIA ban on the Renault cars’ active dampers resembles the ban on mechanical differential brakes in the Mclaren-Mercedes cars. Some say Ferrari had a hand in both decisions. I’m not saying Ferrari is manipulating the rules to secure a competitive advantage, but I’m not saying they’re not either. Changing the rules mid-season is not only confusing and detrimental to the long-term planning for engineers but also upsets the naturally evolving battle for technical supremacy.

The need to keep Ferrari (and the money derived from Ferrari) in the sport is quickly becoming less important than the money pouring into the game by the other manufacturer teams. Ferrari still has some cards to play both on and off the track, but time is running out. The years ahead will certainly see many more Ferrari victories, and the strong likelihood of a world champion in the person of Kimmi Räikonnen, but the team will eventually face a more competitive battle for F1 supremacy.

The new manufacturers’ teams have more money and resources than the Italians. As a result, we’re already seeing a better grid; the qualifying grid at Monza was closer than we’ve seen in a long time. Finishing positions are also in flux. Jenson Button’s recent win and the podium for Kubica in Monza show that new names are making the grade. Look for these trends to continue—to the benefit of both F1 race fans and the teams themselves.

There is a bump in the road: recent changes in the rules of the F1 game banning engine development and selecting only one tire manufacturer. These changes will slow down the pace of development. Short term, they will help Ferrari, Red Bull and Cosworth. In the longer term, the rules will favor the strongly committed factory teams. But if history is any indication, no rules can really stop the engineers from getting around them and making better cars.

The change in teams is being accompanied by a radical change in F1’s commercial sponsorship. There has been an momentous shift away from the traditional tobacco sponsors (that used to be so important to be included in team names) to more high-tech sponsors such as HP, AMD and Intel. Teams using Intel chips in their trackside computers or engineering mainframes connect the chipmaker’s brand name to the team's success. Despite Ford’s withdrawal from the sport, the automotive industry is still investing heavily in the sport. In fact, Formula One is sealing its reputation as a top showcase for brands and manufacturers– for what they stand for and what we associate them with. And that’s why the sport’s remains vibrant.

Saturn was born “A different kind of company, a different kind of car.” Talk about post-modern irony; GM created the Saturn division to copy Japan’s products, management techniques and manufacturing dexterity. Needless to say, it worked. Friendly Saturn dealers created devoted customers with a “no dicker” sticker and a pretty good range of plastic-paneled cars (the S-Series). And then… nothing much. After leaving Saturn to twist in the wind, losing billions in the process, GM eventually spiked the brand’s independence. And now, finally, the Saturn Aura is here to revive GM’s "import fighter."

The flame wars regarding “imports” versus "domestics" have reached Fahrenheit 451. Ironically enough, I’ve doused those fires by banning “any comments that attempt to impugn this site's authors or its commentators for an anti-domestic car bias.” And I mean it. To those who would malign this website on that basis, I state for the record that TTAC writers apply their critical facilities without fear or favor, regardless of a manufacturer’s national origin. Although I haven’t asked my scribes to take a loyalty oath, I’m sure they love their country. What they don’t love is crap cars.

News flash: the publisher of this site, the author of the GM Death Watch, would like to see The General build an affordable sedan that kicks the snot out of the so-called imports. Why? I’m a pistonhead. I’d like to drive that car, and it would force other automakers to raise their game. I’m well aware that The Big Two Point Five’s supporters will perceive this statement as weak and irrelevant: a personal failure to place our nation’s best interests above personal passion. They believe that car journalists ignore the “fact” that promoting “foreign” cars endangers their fellow Americans’ economic well-being. They consider us the import-loving enemy within.

Back in the 70’s, when the import invasion was just that– an invasion of foreign-made cars by foreign-owned manufacturers– this argument carried some weight. But not much. If ever an industry needed a wake-up call, it was the U.S. automotive market. By and large, in general and in specific, The Big Three’s cars were crap. Now I’m not going to tender my exact definition of “crap.” Suffice it to say, many of the imports were better built, better handling, more fuel efficient and cheaper than their American competition. Equally important, the journalists who pointed-out the imports’ relative excellence were not responsible for their arrival, or the domestics’ abject failure to rise to the challenge.

Today, the “buy American” argument is totally without merit. A number of TTAC articles have noted the imports’ American design and manufacturing presence relative to The Big Two Point Five’s outsourcing. When GM, Ford and DCX build and import foreign-made cars and slot an ever-increasing number of Chinese parts into their vehicles, their supporters have no right to drape themselves in the American flag. They also have no right to label critics of GM, Ford and DCX products unwitting opponents of the American working class, when the companies themselves show no compunction about selling foreign-made products to their American customers.

Nor are The Big Two Point Five's Supporters on solid ground when they suggest that TTAC’s car critics have been so blinded by their love of “foreign cars” they can’t see that GM, Ford and DCX have caught-up with the competition. My writers know their way around cars. They know what makes an interior a pleasure palace or a penalty box. They understand the subtle differences between engines, transmissions, suspensions, brakes and steering. They are not in the thrall of European dynamics or style; they can appreciate a big, brash comfy cruiser as much as a gorgeous, sharp-handling sports car– regardless of the vehicle's country of origin. If a TTAC writer says a Ford product is two model cycles behind a comparable Toyota, it’s the truth– to the best of that writer’s knowledge and critical abilities.

The pro-Detroit flamers last refuge is reliability; I’m well and truly fed up with arguments on this score. Supposedly, the gains made by The Big Two Point Five’s products in the most popular reliability studies prove that their cars are now as good as anyone else’s (no matter what anyone says to the contrary).  In fact, the closerthanthis results listed by these studies simply show that the battleground over automotive excellence has shifted. It’s no longer good enough for a car’s suspension not to break; it has to deliver superlative ride quality. A long-lasting engine isn’t a major advantage; it’s got to be smooth, powerful and fuel efficient. The real competition now surrounds perceived quality and, lest we forget, dealer service. I don't consider it biased to suggest that The Big Two Point Five have a long way to go in these areas.

In short, TTAC is an equal opportunity website. Do I really need to cite all the positive reviews this website has given The Big Two Point Five's products, or the negative reviews afforded imported cars? Tallying-up the hosannas and Bronx cheers within those two categories would reveal nothing but an invidious distinction. The cars and their manufacturers get what they deserve. Nothing more, nothing less.

So here’s the deal. If you want to hash out this issue, do it right here, right now. Get it out of your system. Do American cars suck, or are journos giving them a bum rap? You be the judge, jury and… executioner. But once you’ve had your say, you’re done. If you disagree with a reviewer over his or her assessments of a car, feel free to let rip. But I will NOT tolerate knee-jerk xenophobic attacks. All such comments will be deleted. Their authors will be banned. That is all.

In a recent Saab TV ad, a fighter jet transmogrifies into a 9-7X. The Transformers shtick tries to convince truck buyers that Saab’s SUV was “born from jets.” There’s one small problem: the 9-7X was born from a Chevrolet. The model’s built in Moraine, Ohio next to (and out of) Trailblazers. And get this. During the transformation the engine rolls down into the engine compartment sideways. Couldn’t the geniuses who made this commercial bother to remember that the Trailblaz… uh… 9-7X has a “north-south” engine, not an “east-west” one like current Saabs? And so car companies continue their assault on pistonheads’ intelligence.

Fuel efficiency is the latest battlefield. Both Toyota’s “Hybrid Synergy” and Chevy’s “we sell loads of cars that get 30 mpg or better” ads may fool most of the people most of the time, but automotive alphas realize both companies peddle vast fleets of gas-guzzling trucks and SUVs. We’re also aware that Toyota would prefer their customers to pick-up a profit-rich Sequoia rather than a high-tech loss leader, while Chevy would more happily put you in a Suburban than one its low-powered, low margin base models. And by the way, when did it become OK for automakers to advertise a vehicle’s EPA highway mileage without identifying it as such? 

By the same token, we must endure car ads which lure us into a patently absurd, alterative reality. How about that Suzuki ad where Joe Businessman leaves a commuter house, kisses wifey bye-bye, dives off a cliff and parachutes to his Vitara? The scenario inspired my teenage son to ask “If the Vitara is so good off road, why does he have to park it way down there? Why didn’t he just drive it home?” Honda’s recent ad for the Ridgeline is equally ludicrous.

A brown bear blocks fishermen driving home. Instead of simply driving past the beast or reversing out of harm’s way, one intrepid camper gets out, fishes a salmon out of the Ridgeline’s in-bed trunk and tosses it at the bear. It’s a good thing they didn’t have a bed full of camping gear; that bear would have had them all by the time Mr. Sierra Club got to the fish. Actually, it’s a good thing Honda’s customers aren’t generally that stupid; otherwise, simple Darwinism would winnow their market in no time.

And then there’s the “silly little fairy” line in the Caliber commercial. Anyone who knows cars, sexual politics or advertising understands that Dodge is gay bashing to macho-up the po-faced hatchback genre. Hummer’s tofu ad makes the same mistake in reverse, fighting a rear-guard campaign against people who see the over-sized SUV and mutter the word “over-compensation.” You know: the guy buys an H3 just to prove to he has adequate OEM reproductive equipment. The original tagline for the commercial was "Reclaim your manhood."  After a few airings it became “Restore the balance.” Apparently they didn’t want to alienate car-savvy eunuchs.

As a pistonhead of a certain age, I know that repetition is the better part of remembering. But how many times can a car mad curmudgeon listen to the faceless voice intone, "It's here, but not forever" about the Lexus model year closeout without wanting to shout “No, it just seems that way”?

And whose idea was it to use bobbleheads in the Jeep Compass commercial? Is the car really so lame The Dark Lords of DCX couldn’t find anything to say about it? While there’s a percentage of the population who’ll nod their heads in unison with their spokesdolls, surely Jeep should make some kind of case to people who are actually interested in cars, rather than assault us with bizarre imagery. Speaking of creepy, how about that Mercedes “Cruise Night” ad with a drag race between Celine Dion and a metrosexual?  Why would a German automaker want to show Americans a world where every single car is a Mercedes? That’s just not right.

It’s time for carmakers to try something novel that won’t insult their core clientele. It’s time for them to tell the truth to the people who know what’s what. For example, an ad for a Chevrolet Impala would show shoppers browsing rows of washing machines, refrigerators and Impalas, choosing the Chevy as their favorite transportation appliance. A Freestyle ad could show a divorced couple actually behaving like a divorced couple, instead of acting as if they’re on a date.

“Dr. Z” would confess that Karl Benz invented the car, not Daimler-Chrysler, and sell the 300 as the finest last gen E-Class Mercedes money can buy (including his beloved rear suspension).  Mazda would own up to the fact that their CX-7 has more in common with a Fusion than with a Miata, and recommend buying a CX-7 because it’s not a Ford. Oh, and no one would ever claim anything based on JD Power survey results.  Then again, maybe not.  

Motor Trend just reviewed the new Saturn Aura. Reading between the lines, it’s clear that GM’s mission critical mainstream motor is another in a long, not-so-illustrious line of “almost” cars. It’s “no sports sedan” with lots of “corner cutting” powered by a “crude” engine with “some looseness in the drivetrain.” The Aura is a “step in the right direction”– that leaves the badge-engineered Opel at least two steps behind the competition. Anyway, does it even matter? I reckon GM’s car business is beyond repair. 

For the first time, the California Motor Car Dealers Association published new car registration data listed by brand. In the second financial quarter, Toyota captured 24.4% of the Golden State’s automotive market. Honda scored second place, at 12.4%. Then it’s Ford at 9.6%; followed by Chevrolet, at 8.2%. If national sales follow California’s lead, GM is toast. There is no way The General can support its vast infrastructure, overhead and labor costs, there’s no way the company can downsize quickly enough, to survive on that kind of market slice.

The automaker’s California conundrum: the resale market. There isn’t one. Hundreds of thousands of California immigrants, first-timer buyers, commuters and elderly consumers swear by used Hondas and Toyotas. Their preference creates a vicious circle: buyers shun new GM products because they can’t unload them. In the mass market, big depreciation is a kind of living death.

Never mind the BS about GM’s products being torpedoed by left-leaning, import-loving— I mean, “foreign-owned automaker”-loving journalists. GM shot itself in both feet and both arms for decades, building rental fleet fodder instead of competitive product. Even if you accept the dubious notion that GM now makes automobiles that match Toyota's and Honda’s (on some levels), even if you swallow the argument that GM is suffering from an indefensible “perception gap,” there’s only way to reverse this death spiral: "must have" products.

Not decent cars. Not reasonably competitive cars. Not cars that only make sense because they’re so damn cheap and no other new car dealer (except Ford) will give me a loan. Not the new Saturn Aura. I’m talking about cars like the Saturn Sky— only with room for four adults and a trunk.

Saturn’s new motto– “Like Always. Like Never Before”– says it all. Here’s a company, indeed an entire corporation that needs to sever its ties to its mediocre, vainglorious past and build spectacular products. It just… can’t… do it. I know; Saturn’s motto supposedly reasserts their user-friendliness. But what does “Like Always” say to people who dismissed Saturn as a boring, out-of-date brand?

By the same token, what does “Like Never Before” say? It’s a po-faced claim that Saturn is better than it was, not better than the rest. It’s that inwards-facing commitment to relative improvement that defines the vast majority of GM’s products and condemns them to also-ran status. Not that GM knows it. The General’s complete obliviousness to the average non-customer’s opinion of their products is one of the most disturbing aspects of GM’s fall from grace. Well that and their failure to acknowledge their competitors’ achievements and beat their best-in-class benchmarks.

Detroit’s unjustifiable arrogance towards the imports in the 70’s is well known. But few people appreciate the fact that this holier-than-thou attitude is still in effect, informing everything the company does– and doesn’t do.  I recently received an email from a GM insider containing a memo from Ed Wellburn, GM’s Vice President of Design. After proclaiming “GM’s turnaround plan is truly working as witnessed by our 2nd quarter results”, Wellburn issued a new edict:

“Design Center is host to journalists, ‘celebrities’ and senior management up to and including the Board of Directors. The confidence we have in our products and people should be evident to anyone who drives on the Technical Center site, especially in the vicinity of the Design buildings and adjacent roads. 

“As such, I am directing that ONLY GM products be parked on the roads around Design and in the parking area in front of our building. Any employees or suppliers/vendors who are not driving GM products may use the west and north parking lots.

“Effective August 15, 2006, this policy will be in effect. After this date, any non-GM vehicles parked on the roadways or in designated parking areas in front of the Design building will be ticketed. In the case of multiple offenses, the vehicle will be towed at the owner’s expense.”

And there you have it: GM management’s desire to shelter in their own little universe, quarantined from the realities of the outside world. Think about it: Wellburn's directive sends both employees and visitors driving non-GM vehicles to the back lots. It also means that GM-driving designers who enter the building upon which their company’s fate depends only encounter GM products. In short, what you can’t see… can kill you. 

Every time an automotive research firm releases the results of a reliability survey, the focus is the same: who “won.” Firms like J.D. Power only publicly release model-level results for the top performers. Even where these firms release scores for all contenders at the make level, journalists focus on the winners. After all, John Q. wants someone to tell him which car to buy in as few words as possible. In the process, any car buyer truly interested in identifying the best car for their needs and wants gets left in the dark.

Yet few people realize this. It seems so natural to focus on the winners, whether the topic is an election, the NBA playoffs, or vehicle reliability. But let’s play “which one of these is not like the others” for a second. If someone wins an election by one vote, they get the office. If a team wins a deciding playoff game by one point, they get to move on to the next round. And if you buy the car that won an award by one point, you get…what?

In most cases, you do not get the car that best suits your needs. When evaluating a car, most people care about more than whether or not it’s the least likely to break. They’re also likely to be concerned about how it looks, how it drives, how well the seat fits their rear and more. Often the award winner isn’t nearly as attractive, as fun to drive or as comfortable as a competitor. Tradeoffs are a necessary part of the purchasing process.

Most reliability surveys provide dot ratings– with unspecified ranges of reliability– for the non-winners. But without the actual, precise scores for all the contenders, trading off quality against other factors is impossible. Buy the award winner and you’ll have a pretty good idea of how much style, performance, or comfort you’re giving up. But you won’t know how much “quality” you’re gaining in return. Say it’s one dot’s worth. Well, how much is that? Unfortunately, to make a wise choice, you need to know.

In a basketball game, a basket at the final buzzer can and should be the deciding factor. The closer the game, the more exciting it is to watch. But vehicle reliability isn’t about entertainment (though the news stories that cover the awards may be). The closer scores are, the less they matter. And the scores are often quite close.

In J.D. Power’s 2006 Initial Quality Study (IQS), 30 of 37 makes fell within two-tenths of a manufacturing defect per car of the average. The difference between number three (Toyota) and number 32 (Hummer) was 0.27 problems per car. In J.D.’s most recent Vehicle Dependability Study (VDS), 23 of 37 makes fell within half a problem per car of the 2.27 average. Only four makes— three of them domestic— bettered the average by more than half a problem per car.

Real-world problems occur in wholes. A car cannot have 1.79 problems. So Toyota’s VDS score of 179 implies that the typical Toyota has two problems in its third year. And Ford’s score of 224 implies… much the same thing. Buy a Toyota over an alleged “Fix or Repair Daily” car, and you gain no guarantees, just a middling chance of avoiding a single additional problem in the third year.

No one gets all hung up on vehicle reliability to avoid a single additional problem. Most consumers simply want to avoid buying a lemon that’s in the shop “all the time.” Well, reliability scores based on averages don’t help. Say we’ve got two basketball teams. On one, the average height is 6'5”. On the other, the average height is 6'7”. Which team has the most players over seven feet? Using averages alone, it’s impossible to say.

Time to buy a car. You know the award winners, and not much else. Play it safe and you’re likely sacrifice style, performance or comfort to maximize your odds of having one or two fewer mechanical problems. Ignore the surveys and there’s no telling how much car trouble you’ll have. Maybe none at all. Maybe a lot. The research firms know. But they’re not going to tell you. They only provide potentially helpful comprehensive data to corporate clients willing to pay the big bucks. 

Hang in there. My website, TrueDelta , is committed to clarifying how cars differ in reliability, from the "best" right down the “worst.” We’re working hard to collect unbiased real-world data on your behalf. And TTAC can always be counted on to go beyond the superficial story. (How many critiques of J.D. Power’s methodology have you seen in the mainstream automotive press?) Someday soon, you’ll be able to identify the car that best suits your needs and wants— without playing a guessing game that’s stacked against you.

Last Friday, Ford announced its largest production cuts in over two decades. The bold (not to say unavoidable) move comes in the face of evaporating truck sales; even large discounts on the formerly formidable F150 and Explorer can't move the metal faster than it's being built. With a debt rating that’s sleeping with the fishes, with the company’s “Way Forward” recovery plan in triage, with another disastrous quarter only days away, Ford is looking increasingly, irredeemably desperate.

The cutbacks are large in both scope and scale. Ford’s rolling production blackouts will hit ten assembly plants in total. The Blue Oval Boys will reduce output by some 21% for this year’s final financial quarter, shrinking total vehicle production to just over three million vehicles for the year (roughly nine percent behind ‘05 totals). Ford truck plants will fare the worst, losing 404k units from previous annual output targets.

That's not good. Last year, Ford’s F-Series pickup trucks accounted for nearly a third of the company’s 3.2m US sales total (or more than seven times Volvo's American sales). For the first time in three years, the F-Series will not reach its sales target— not even the revised 900k mark recently put forth by embattled CEO Mark Fields. With over 270k units depreciating on dealer lots, America’s best selling truck will bear the brunt of at least half of the cuts.

No matter how you look at it, coming-up short is gonna hurt. Ford’s Michigan Truck factory was once one of the world’s most profitable production facilities; through the late 90’s, it generated some $10b in annual revenue. While Ford doesn’t divulge production costs or profit margins for its individual vehicles, analysts indicate that each F-series pickup delivered $13k in profit. The evaporating truck market has put Ford’s cash cow on the barbie, and there aren’t any newborns ready to lactate greenbacks on their behalf.

Falling revenues are only half the problem. J.P. Morgan analyst Himanshu Patel figures Ford’s decision to downsize production will cost the company $1.4b this year, and around $2.7b in 2007. The main reason: Ford’s current contract with the United Auto Workers (UAW). Idled union workers will receive a Supplemental Unemployment Benefits (SUB) package. After an initial period of partial government support, Ford will have to pay them 95% of their normal take home pay for a 40-hour work week, for not working.  Union members with at least ten years’ service will still receive full employer-paid health insurance.

Looking ahead, the UAW contract also stipulates that no union worker can be laid off for more than 48 weeks due to a decline in sales or production. While it’s doubtful that production would halt for that long, the 48 weeks is cumulative for the entire four year agreement. Short term, expanding their blue collar buyout program is the only way for Ford to staunch their “death by a thousand cuts” labor cost wounds.

Unconfirmed reports indicate that Ford will put buyout offers on the table to all their hourly workers in the next week. UAW V.P. Bob King has already stated that he could convince his brothers to stay home– for the right price. But none of this will solve Ford’s cash crunch. Only an immediate series of blockbuster new products and a new, more favorable union contract can do that— neither of which is likely.

Again, there's no immediate relief on the product front. Sales of fuel-sipping B-segment cars are up 43 percent and growing. In most urban markets, Honda, Nissan and Toyota dealers can’t keep up with demand for their Fit, Versa and Yaris, which are selling at full retail or, wait for it, better. Despite finally admitting the seriousness of this market, Ford has yet to announce a B-segment buster.

Meanwhile, Ford’s desperation is there for all to see. Yesterday’s announcement that FoMoCo would follow GM’s lead and offer up to 72 months of zero percent financing to anyone with a pulse is a clear-cut indication that Ford is willing to do anything to stay in business— including cheapening the brand and mortgaging their future. Ford isn’t even trying hard to hide the fact that they’ve thrown open their doors to sub-prime borrowers. "If you were on the margin for being approved for a loan,” Ford flackmeister Jim Cain said. “You are more likely to get a loan today than you were a week ago."

The question is, is Ford more likely to avoid Chapter 11 than it was a week ago?  Ford's market share is still declining rapidly– from last year's 25.7% to this year's 18.1%. The company would like you to believe that the production cuts reflect a new, new realism and demonstrate management’s courage to make difficult decisions. Which may be true. But the old maxim “You can’t cut your way to prosperity” is just as true for Ford as it is for GM and DCX. Ford is still poised for breakup, merger or bankruptcy.

Timing is. Everything. Case in point: Toyota is about roll out its re-designed Tundra. The full-size pickup represents a huge investment for the automaker, including a brand new factory deep in the heart of Texas. By all accounts, the new Tundra will hit the market just as “lifestyle” load luggers have left the building, abandoning the genre for smaller, more fuel efficient machines. But as bad as Toyota’s timing may be for their corporate aspirations, it's worse for the so-called domestics.

It’s no secret that the majority of The Big Two Point Five’s profits (such as they are) come from SUV’s and pickup trucks. Nor is it a revelation that the enormous profits generated by the genre during the last two decades enabled their short-sighted product lethargy. Now that America’s truck optional buyers are leaving their gas-guzzling leviathans in droves, the Big Two Point Five are feeling the pain of putting all their eggs in a truck-shaped basket.

The Mustang is the only main-line car generating significant profit for Ford, and both GM and Chrysler are building direct competitors. DCX has the 300 and the Caliber, but their product mix is still heavily skewed towards SUV’s and pickups. GM is thoroughly truck-dependent. All three companies are busy retrenching, slicing production to match the new marketplace realities. All are incurring huge costs. When it comes to their line of profitable pickups, none are looking for a fight. But a fight is what they’re gonna get.

Many industry types scoff at the prospect. Toyota has been selling full-size pickups of one sort of another for over a decade, without great success. Nissan’s Titan jumped into the fray a couple years ago, to equally modest sales. Their failure to crack this money rich market segment begs the question: what have The Big Two Point Five done right?

Possibility one: the so-called domestics make great trucks. Despite general problems with vehicle quality, the Big Two Point Five have managed not to create a large pool of angry pickup truck buyers. Sure, they’ve built some duds, but nothing dire enough to alienate customers. The foreign owned automakers’ “full size” pickups have also been rather smaller, to no great advantage.

Possibility two: loyalty. The so-called domestics tout loyalty as their trump card, and concentrate their attention on beating each other up. But loyalty hasn’t kept foreign-owned automakers from making inroads into the compact pick-up business. And it hasn’t stopped Toyota from overtaking Ford in the overall U.S. sales chart.

Possibility three: luck. It’s not what Ford and GM have done; it’s what Nissan and Toyota haven’t done. Until now, Toyota and Nissan haven’t built the right products or added enough production capacity to build a significant number of pickups trucks.

Toyota is set to attack on all fronts. The company has spent hundreds of millions of dollars to create a Tundra that’s a match for the industry leader, the Ford F150. The new Tundra is bigger and stronger; more macho, durable and comfortable than any previous Toyota entry. If that isn’t enough to lure brand loyalists, Toyota will do whatever it takes to recoup their investment. With new American production capacity north of 250k units per year (and room for more), Toyota will react to market indifference by launching a price war.

There are two main reasons profit margins on pickup trucks are so high: supply and demand. In the last few months, U.S. pickup sales have tanked, flooding dealers with product, forcing incentives, driving down margins, slicing profit. The injection of tens of thousands of new Tundras into the market will surely accelerate this trend. Toyota’s non-union cost advantage, their never-say-die, take-no-prisoners attitude and their deep pockets all guarantee that it's only a matter of time before they undercut prices and force the so-called domestics’ to pare pickup profits to the bone.

Initially, the fleet sector may see the most action. On its home turf, Toyota puts a lot of energy into grabbing fleet clients to sew-up market share. Fleet buyers are far less brand loyal than private buyers; business owners are far more amenable to rational arguments. You can bet Tundra salesmen are busy boning up on their cost of ownership charts.

Truth be told, the so-called domestics are well-positioned to stave off the threat— at least in the short term. Their pickups may be mechanically simple, but they’re highly evolved with more than reasonable reliability. No matter how good Toyota’s Tundra or low its price, conquest sales will be a bitch. But The Big Two Point Five are vulnerable; they can’t afford to fight on price. They need every pickup truck buck to fund their new product plans. DCX may not suffer badly (for now). But Ford and GM are so cost-heavy, cash-starved and product deficient that fierce pickup competition could mean that their time at the top of the heap is finally over.

Toyota’s RAV4 is often called a “cute ute.” For die-hard SUV drivers, the label is sacrilege, implying that the small four-by-four is a downsized, de-butched truck. To paraphrase the B52’s, WELL IT ISN’T! Like many so-called crossovers, Toyota “Recreational Active Vehicle with 4WD” is a hatchback on stilts that looks something like truck and drives something like a top-heavy station wagon. Despite these drawbacks, the RAV4’s runaway success has green-lighted the entire crossover genre. The latest version tells us all we need to know about the niche’s immediate future.

Somewhere between the proud homeowner and carefree apartment dweller lives the best of both lifestyles. Who wants to throw money away on a rented apartment or deal with the hassles of home ownership? Enter the townhouse: smaller bills and fewer hassles than a full-size home with more usability than a mere apartment. Just like a townhouse, the mid-size pickup combines attributes of rigs both big and small. And ever since its inception, the Toyota Tacoma has been living large in the mid-size pickup penthouse.