GM swears up, down and sideways that they will not stage a repeat of last summer’s Fire Sale for Everyone discount program. And yet inventories are up, sales are down and if they look sideways they can see their competitors printing up blowout banners. “Value Pricing” be damned. The General knows that every sale surrendered to Ford, Chrysler and Toyota eats into its already dwindling market share, rendering GM’s production cuts less and less effective. Besides, the cuts are expensive. GM needs dealer cash now. So it’s not a question of “if.” It’s a question of “what then?”

This is the GM death spiral: larger and larger production cuts in response to a smaller and smaller market share. When GM CEO Rabid Rick Wagoner stepped-up to the microphone a little over a year ago and announced he was going to cut 25k jobs, the media was aghast. American manufacturing is under attack! Our industrial base is shrinking! These days car hacks and Wall Street celebrate the fact that GM and Delphi workers are rushing for the exits by the tens of thousands. I guess someone stashed that old saw about “not being able to cut your way to profitability” in the wood shed and forgot about it. Well, at least until the next financial quarter’s [delayed] results prove that a corner turned can lead straight to a dead end.

Meanwhile and still, stabilizing the patient is Rabid Rick’s first priority; otherwise the amputations will be a success and the patient will die. A great deal of attention has been lavished on the financial details of GM’s union buyout plan. Little has been said of the timing. While GM’s 113k union members are busy weighing up the pros and cons of trading “secure” employment for cash money and [somewhat] reduced benefits, their factories are busy churning-out vehicles no one wants to buy. Rick’s mob can’t shut off the spigot. All The General can do is whatever it takes to keep the pipeline open.

And that means discounts. Of course, GM will not call the next big US incentive campaign an Employee Discount. For one thing, it won’t be long before they don’t have any employees left. But seriously folks, Rabid Rick has once again given himself enough wiggle room to accommodate Greg, Jeff, Murray, Anthony and their entire international fan base. In a recent interview, Wagoner said GM would stick to its policy of “simpler pricing.” In case you missed it, those are the new code words for what was previously called “value pricing.” It’s the difference between “here’s what you pay” and “here’s what you pay and we’re not offering any discounts.”

Because, of course, they already are. GM’s $1000 “free gas” promotion is already out there, attempting to lure Californians into gas-guzzling SUV’s. And it’s spread to Florida. How long before the gas cash come-on gets a national rollout? Free gas, 0% financing, rebates– whatever you call it, however you dole it out, the money comes off GM’s bottom line. But it’s Hobson’s choice: lose more market share or lose more money. Of course, GM could tell its dealers to hold the line on price, watch inventories swell, and do both. That’s not only the worst case scenario, it’s the least likely. And speaking of timing…

GM has just convinced its banks to lend it additional money to pay for its union buyouts, plant closures, Fire Sales, etc.  The loan is fully secured.  Hence, S&P has lowered its rating on GM’s unsecured debt to B- .  That puts GM perilously close to the point where Cerberus can walk away from the GMAC deal, denying The General the long-awaited cash infusion.  Equally important, GM now admits it will draw on this line of credit to meet liquidity needs.  The good news for camp followers: GM won’t go bust today.  The bad news: the noose is drawing tighter. 

And make no mistake, the UAW hasn't stepped off the scaffold.  While last week’s UAW convention in Las Vegas had analysts betting that the union bosses are in a conciliatory (a.k.a. “realistic”) mood, when was the last time the UAW made any concessions to the automobile industry? The recent “health care giveback” was actually a $3b union-administered fund. Buyouts are not a concession. If we believe that Delphi is serious about reducing its workers’ pay, if we believe GM can’t fund the difference, the union will have to make concessions. Past history says it ain’t gonna happen dot bomb.

That’s because past history is the only reliable guide to future behavior. When GM launched its Employee Discount for Everyone program last year, the company pronounced it a tremendous success– and waltzed straight into a sales drought and catastrophic financial losses. What’s changed since then? The levels of unsold inventory are higher.

Remember Joe Isuzu?  In the late 80’s, the brand’s spokesman was an actor (David Leisure) playing a pathological liar who’d say anything to sell an Isuzu.  He claimed the Trooper could carry “a symphony orchestra” or “hold every book in the Library of Congress.”  The Impulse was “faster than a [catches a speeding bullet in his teeth]… well, you know.”  While Joe’s commercials-– and for that matter, the Isuzu brand– are busy fading from the American automotive landscape, his spirit lives on.  The main difference between Joe and no-Joe car ads: today's disclaimers are smaller.  You have my word on it.   

On second thought, look for yourself.  Most automobile commercials include a small disclaimer like “closed course,” “professional driver,” “do not attempt” or some other CYA statement mandated by the company’s legal department.  It’s there to protect them against ambulance chasers waiting for a buyer to injure themselves or (preferably) die when they try to make their vehicle do what it did in the commercial– even if that’s just driving around a corner.  You have to wonder about a world where companies showcase an SUV driving off-road, or a sports car zooming through a road course, then feel obliged to tell the buyer “do not attempt” to do the same.  Just what are we supposed to do with these vehicles?   

The TV commercials for the new Mercedes GL-class are probably the best/worst example.  The ads show the Alabama-built off-roader shrugging off the impact of a crash test sled, towing more than a Peterbilt can handle, hauling an entire vacation home full of stuff and tackling a slalom course so fast it sets the cones on fire (actually my first impression was the brakes were overheating so badly they ignited the cones).  All this wouldn’t be too bad if it was presented Joe Isuzu-style, with humorous disclaimers.  Instead, the word “fictionalization” appears in letters small enough to qualify as a DMV eye test, flashing by so fast it could serve as an Evelyn Wood final exam.   

Autodisclaimermania reminds of a five-year old who lies about breaking a lamp but thinks it’s OK (and he won’t be caught) because his fingers were crossed.  When it comes to portraying extreme performance capabilities that might not actually be, you know, possible, or, equally worrying, destroying the vehicle involved in the display, truck ads are particularly notable offenders.  Could someone explain what “underbody digitally modified” meant in the Ford truck ad showing an F-150 crushed between two bulldozers?  Did the frame crumple like a beer can against a frat boy’s forehead?  Why won’t they show us what really happened?  Or tell us they actually crushed four trucks to make that commercial?   

Then there’s a special category of ads operating so far outside the realm of reality they should be classified as novelization.  These ads try to sell us on a vehicle’s ability to cater to/create a particular “lifestyle,” or seek to fill us with warm fuzzies (WF) for a company building vehicles that can’t stand evaluation on their own or relative merits.  Here’s a simple question: how many Americans actually own a kayak?  How many go rock climbing?  Not as many as own SUV’s.  But that doesn’t stop their manufacturers from selling their lumbering land yachts as gateways to the great outdoors.  Nissan may urge potential owners to “tell better stories,” but it would be hard come up with more imaginative fiction that their lifestyle vignettes.  

The poster child for the WF concept is Ford’s “Bold Moves” campaign.  The Coca-Cola style ads show a quick cut montage of bold Americans doing courageous and noble things– from a teenager getting his first driver's license to a woman with breast cancer entering the Susan G. Komen Breast Cancer Foundation's Race for the Cure.  So… where are the cars?  They don’t appear until the ad’s closing seconds.  What does that tell us about Ford vehicles?  Either a great deal (Ford’s ethics, spirit and community service) or nothing (), depending on whether or not you got paid to throw around words like “target demographic.”  

Of course, Ford’s not the only one inviting customers to share their highly selective alternate reality.  Toyota touts their “hybrid synergy” but neglects to mention its profitable flotilla of gas-guzzling Tundras and Sequoias.  GM brags how many of its cars get better than 30 MPG in highway driving, but fails to disclose that their whips are a lot less efficient around town, and that their overall fleet hews closely to the Corporate Average Fuel Economy legislation.  (Unlike BMW.)  

You have to wonder who the car makers and their advertising lackeys think they’re fooling.  They aren’t fooling me and I doubt they’re fooling you.  The truth is they, like Joe Isuzu, they are only fooling themselves.  And if I’m lying, may lightning strike my computer.

Walking up to the Aston Martin DB9, I couldn’t decide whether I wanted to drive it or sleep with it.   If running your hand over the DB’s sculptured haunches and taut lines doesn’t give you a warm feeling in your nether regions, you should surrender your pistonhead privileges at the door.  Very few inanimate objects attain this level of beauty; those that do either rock your world or break your heart, or, as in this case, both.    

Another year, another J.D. Power survey. Since the non-profit Consumer Reports organization prohibits carmakers from using its ratings in their ads, “ranked highest in initial quality by J.D. Power and Associates” should start flooding the airwaves and Internet any minute now, with print sure to follow. But does all of this noise signify anything? Should those seeking trouble-free wheels be sure to buy one of J.D.’s winners? Hardly.

First, note the “initial” that qualifies “quality.” Power surveys car owners on “problems” encountered within their first 90 days of ownership. Most people understand that a car that’s reliable for 90 days isn’t necessarily reliable beyond that. But there’s a bigger issue. J.D. Power’s IQS has been redesigned (for the second time) to encompass a larger number of potential defects. And the more the IQS includes, the less it measures what most people want to know: vehicle reliability.

The previous redesign doubled the average number of reported problems per car by extending the IQS beyond defects (that can be fixed) to designed-in annoyances (that must be endured). For example, cupholder dissatisfaction famously slammed MINI’s score. The 2006 IQS report takes a step in the right direction by including subscores for "design quality" and "production quality." Combining two very different elements into a single score makes it unclear what the number represents. Yet this score receives 99 percent of the press coverage and 100 percent of the ad citations.

If you compare the rankings based on production quality alone, the brands’ relative positions change dramatically. BMW bounds 24 places to third; Buick jumps 14 to eighth; MINI ascends 13 to 16th; Mercedes-Benz climbs nine also to 16th; Subaru also gains nine to 19th. At the same time, Dodge drops eight to 27th; GMC plummets 13 rungs to 22nd; Nissan plunges ten, also to 22nd. Eight others change position by at least five slots. These include Chrysler, which shares many models with Dodge yet moves up five places, to fifth. Out of 37 brands, 16 rankings are heavily affected by the inclusion of design quality.

Beyond the cloudiness of the revised methodology, the way the results are reported and spun continues to put too much emphasis on relative rankings. In fact, absolute differences are often minuscule. Looking at defect rates alone, 22 out of 37 brands fall within one-tenth of a Problem per Car (PPC) of the 0.64 average. Thirty of 37 brands fall within two-tenths. Of the seven beyond this range, only one, Lexus, is on the top, and it only betters the average by 0.22 problems per car.

Stay with me here. The best brand, Lexus, has 0.42 problems per car, while the worst, Isuzu, has 1.10: a best-to-worst difference of 0.68 problems per car. Even this range results from a few especially low-scoring brands. The difference between number three (Toyota) and number 32 (Hummer) is a scant 0.27 problems per car. It’s ironic, since brands at the bottom of the chart receive the least attention in J.D. Power’s press releases. For years they didn’t even publicly release below-average scores.

Put another way, a Toyota compared to a Hummer has a one in four chance of having a single additional problem. Even comparing a car from Isuzu with one from Lexus, only two in three cars will have a single additional problem. What’s more, this additional problem is likely to be the only problem. Folks, we're talking about a single trip to the dealer for a single problem–which you still face nearly even odds of taking if you buy the best brand.

The reason why J.D. Power lumps design quality into the IQS is clear: without it, the differences between brands are rarely worth debating. And the smaller the differences, the less people care about IQS. And the less the pubic cares about IQS, the less automakers will pay to advertise IQS scores, and hire Power consultants to help improve them. This would truly be a problem– for J.D. Power.

J.D. needs to re-think their methodology and reporting. They should keep problems that require repair separate from other issues. Forget the brands, they don’t vary enough. Instead, emphasize model scores. Next, focus less on rankings and who is the best and more on the size of the differences and who is within spitting distance of the best. Finally, J.D. Power needs to shift their emphasis away from “initial quality” towards long-term durability. Manufacturers won’t like that a longer-term study keeps new models off J.D.-branded consumer radar, but anything less is, well, less.

Heck, J.D. Power might even rake in more cash this way. Anyone reasonably near the top—and not just those at the top—could advertise “ranked good enough in quality that you should focus on other criteria by J.D. Power and Associates.” No, it’s not punchy. Just the truth.

[Michael Karesh operates www.truedelta.com, a vehicle reliability and price comparison site.]

My name is Robert, and I’m an obsessive. You may have noticed. You may have returned to an article on TTAC and clocked the fact that our writing evolves post-post. That’s down to me. If there’s a better way to say something, if there’s a single sentence with passive construction or a word that’s not pulling its weight, the text must die. If a reader spots a factual inaccuracy or logical inconsistency, it must be corrected. I’m not looking for credit; it’s just the way I’m wired. But if you want to know why GM deserves to die, why GM WILL die, there’s your answer. They lack obsession.

You’re car guys. You don’t need me to tell you this. You’ve encountered a GM product and seen, heard or felt cheap, lazy-ass design, engineering and manufacture. A rough-revving four, a removable seat that slices your skin, a button that feels nasty to the touch– some detail where you shake your head and think to yourself, if I was building a car, I wouldn't let that slide. I recently opened the trunk of an Impala SS and discovered an electrical cable hanging in air like a loose intestine from a hernia operation gone bad. The wire was wrapped in duct tape whose end was already starting to unfurl. As an owner, that would drive me nuts. As a builder, I’d spend my own money to put it right. It’s unforgivable. 

I’m serious. Don’t talk to me about building to a price. I’d rather not build the damn car than know that I’d participated in something so obviously crap. The next time you look at a modern GM product, take a mechanic and/or an engineer and have them show you the dozens of ways GM fails to go the distance. Even when they get it right, they get it wrong. The Chevrolet Corvette is an interior [and properly bonded roof] away from greatness. Why?

Suffice it to say, GM has too many brands, too many models, too many managers, too many dealers, too much union interference and a CEO who counts beans. GM apologists point to JD Power’s awards and tell the world that The General’s whips are good and getting better. Bullshit. Their cars, trucks and SUV’s are only “good” in isolation, or in comparison to the junk they produced ten years ago. Examine a comparable Toyota, and you’ll instantly understand that there's a reason GM has been losing market share for decades, and it ain't the media.

So now we hear that GM will live. That's the conclusion many pundits have reached since The General has finally fulfilled our prophesy and bailed out bankrupt parts supplier Delphi. Of course, Friday’s announcement that GM would pick-up the tab for extending the buyouts of Delphi's union workers, welcome 5k Delphinians back into its own operations and “top-up” the remaining workers' paychecks (so that Delphi can pay them less without paying them less) arrived without a price tag.

The Detroit News (DTN) reported the deal in full “historic agreement” mode (NB: the last time that happened, GM set up a $3b health care fund for the UAW and the DTN called it a “historic union health care giveback”). GM will supposedly pay 50% of the cost of the more extensive Delphi buyouts, which now include “up to $35,000 and full benefits to workers with at least 27 years on the job and cash buyouts, ranging from $70,000 to $140,000, to lower-seniority workers.” For some strange reason, GM, Delphi and The Detroit News all failed to a put a number on the new plan. Our best guess is about $1.2b, not including another $4b – $5b or so for pensions and health care benefits (for some but not all of Delphi's union refugees).

Delphi also revealed that it’s assuming (yes, assuming) that GM will provide a $50k payment per remaining worker, so Delphi can cut union pay from $27 to $22 to (eventually) $16.50 per hour. If 5k union workers remain, that arrangement would cost GM an additional $250m or so. If GM doesn’t stump-up the cash, Delphi still says it’ll play "how low can you go?" In that case, they're still talking $12.50 per hour– a number that has UAW strike written all over it. And even if GM stumps up 50 large per, will the UAW wear a $5 per hour reduction? Deep Throat says yes. I say no.

We both say it doesn't matter. Unless GM’s products sell for a profit sometime soon, the company can’t afford any of this. And they won’t sell at a profit, because, in the main, in detail and relative to the alternatives, they suck. To wit: a commentator on Autoblog named D recently said "I can throw a dart at a board covered in every new car offered by Honda, Mazda, Subaru, Toyota and I would be happy with whatever I get. Do the same with Ford and GM and the odds are I will be disappointed with some fleet car piece of junk." And there you have it.

The American consumer stands in the middle of a battlefield. The combatants: American and foreign automobile manufacturers, their unions, dealers and various representatives; politicians representing both northern and southern industrial states, and you. The stakes: profits, derived from the hearts, minds and wallets of red state car buyers. They’ve drawn their lines in the sand. They’ve loaded their weapons. They’ve fired their first salvos in what promises to be an ugly and protracted battle. And they’re all mentally constipated.

Ford drew first blood with its short-lived Red, White and Bold campaign. Characteristically, Toyota responded more authoritatively. Their “We're American” ad campaign declared that Toyota directly employs more than 32k Americans, and creates over 386k more jobs through its dealers and suppliers. Speaking at a visit to one of their Kentucky plants, Toyota’s newly-minted Chairman Fujio Cho spelled it out: "We have been working in the United States, contributing to the communities where we produce… Our workers here, almost all of them are U.S. citizens, so in that way, we are a US company." Then Toyota announced its intention to invade that unique bastion of working class America: NASCAR.

Next up: the Level Field Institute (LFI). Retired union workers from GM, Ford and Chrysler formed this “grass roots organization” because “when it comes to cars, ‘Made In America’ still matters.” The LFI admits that “measuring ‘made in America’ is getting more complicated.” But its ads aren’t bothered by fine distinctions: they simply list American jobs by manufacturer. Ford admits contributing cash to the LFI’s $1m TV, print and Internet campaign. The other domestics have lent the LFI emotional support. "I'm a little offended with Toyota's campaign," said Chrysler Communications Supremo Jason Vines, re-affirming the German-owned company's patriotic fervor. "They are a Japanese car company. Baseball, hot dogs and Toyota? Sorry, it doesn't ring a bell."

Then there’s the United Auto Workers (UAW). The union made their stand on the “buy American” issue perfectly clear years ago, when they convinced their employers to ban or segregate non-American cars from their parking lots. As far as they’re concerned, no true American would be caught dead behind the wheel of something that wasn’t built in an American plant by Americans who all belong to an American labor union and collect union wages (and, oh by the way, pay hefty union dues). The economic survival of the American middle class depends on American solidarity.

The truth is that “built” means “formed by combining materials or parts.” A car assembled in the United States is "built in America." If the artists formerly known as The Big Three (and their stakeholders) want consumers to “buy American,” they should decorate every vehicle assembled on American soil with foot-high letters proclaiming “Built in the USA.” Of course, the Ford Fusion needs a “hecho en Mexico” sticker, the LaCrosse merits a "Construit en Canada” tag and an Aveo should sport the appropriate Korean kudos. While they’re at it, US automakers should identify models sitting on platforms developed by foreign-based subsidiaries, and plainly label vehicles with engines built in China, transmissions built in the Philippines, electronics from Korea, or hybrid systems designed and made in… Japan.

In fact, when it comes to domestic parts content, even the LFI can’t avoid the flag-waving hypocrisy. If you scrutinize their list of US vehicles’ domestic content, you’ll see that there isn’t a single vehicle for sale that’s 100% American. Aside from the Mazda Tribute and Ford Escape (snap), the “most American” cars you can buy are only 90% domestic. And quite a string of losers it is too: the Mazda B-Series, Saturn L, Chevy Malibu and Ford Econoline. There are a few 95 per centers, but the LFI fails to mention that these models are either dead (Alero, Taurus) or marked for death (Marquis). The LFI lauds GM for providing the most US jobs (more than all foreign-owned automakers combined), but they neglect to mention GM’s huge and growing investment in Chinese parts manufacture.

Let’s cut to the chase. If you look beyond the ads and news articles about what is or isn't "American made," the real defining factor is whether or not the car is built by a company controlled by the union. The manufacturers being targeted by this campaign are those with non-union plants who enjoy a healthy relationship with their laborers and a healthy profit statement. The cars this campaign’s backers would have everyone buy are built in plants where the employees' allegiance is to a union, not to the company that pays their wages. It's time someone cut to the heart of this “buy American” campaign and exposed it for what it is: a rehash of the old "look for the union label" campaign. Americans didn’t wear it then, and they’re not about to wear it now.

Remember the Cougar? Not the oddly-shaped front-wheel drive Cougar of 2000 nor the big-bodied Thunderbird clone, nor even, God forbid, the huge sedans and wagons wearing “the sign of the cat,” but the 1967 original? Motor Trend’s Car of the Year was created from the Mustang. While it shared the Pony Car’s platform, it was NOT a badge-engineering model. Sales of the luxurious new coupe helped to lead the Blue Oval to some of the most profitable years in the company’s history. Hello? Ford? Anyone home?

It’s been a couple of years since the latest generation Mustang hit the streets. The retro modern two-door is a runaway success, easily out-selling the nondescript sedans that have become Ford’s standard bearers. At the same time, the Mercury brand languishes, offering customers nothing more than thinly-disguised Ford sedans and trucks. It’s time, past time, for the new Mercury Cougar. Stretch the new Mustang platform, drape it with drop-dead gorgeous sheetmetal, stuff it full of luxury (and a hundred pounds more sound insulation) and there you have it: a slam dunk sales winner and a halo car for a moribund brand.

In fact, there’s only one way a new Cougar wouldn’t work: if Ford re-sculpts the ‘Stang’s front and rear, tacks on some brightwork and badges the Mustang as a Cougar. That Milanese-style product would dilute the Mustang’s appeal AND fail to create a compelling reason for luxury car buyers to darken Mercury’s already dim door. An ersatz Cougar would drag the brand’s street cred even lower– if such a thing was possible. No; while a new Cougar would bring glory to a deeply wounded brand, it must be done right, or not at all.

A Cougar absolutely demands arresting styling. Since Ford’s hometown designers seem singularly incapable of creating anything other than boring and innocuous cars, why not call in Aston Design Director Marek Reichman, the man who penned the sublime Aston Martin Rapide? As PETA and other animal rights activists have made it virtually impossible for a big cat to work in the ad business, Mercury could make the Brit-born designer the brand’s official spokesman. “Aston Martin elegance made in America” would be a winning slogan.

Anyone who’s been fortunate enough to spend some quality seat time in a Land Rover, or a top-spec F150, knows that Ford can make great interiors. To produce a suitably luxurious Cougar, Ford could add luxury touches to the Mustang’s cockpit that aren’t available in the ‘Stang: automatic temperature control, twilight sentinel headlights, memory seats, sat nav and all the other luxury car necessities. Ford knows exactly how to do all these things, and I’m sure that they have the hardware on the Lincoln shelf to boot. If the new Cougar wants a “killer ap,” they could even fit it with a Borg-Warner dual-clutch paddle-shift transmission (a.k.a. Audi’s DSG).

A new Cougar could be Mercury’s re-entry into racing. If the Ford Fusion and a Toyota Camry can be NASCAR racers, surely the Cougar could be as well. Perhaps LeMans would be a better venue. After all, that’s where Aston Martin made their reputation. If Corvettes and Vipers can make a credible attempt, surely a Cougar, with the right preparation, could at least make a showing. The combination of a stunning design and the hype of a [properly promoted] racing effort would ramp up the excitement at Mercury dealerships to unseen levels.

Equally important, a “real” Cougar wouldn’t be a horrifically expensive endeavor for the cash-strapped domestic automaker. There’s nothing wrong with the Mustang platform that a little refinement couldn’t cure. Adding the aforementioned four inches to the wheel base would give the coupe passable rear seat room. The Mustang GT already has a two-piece driveshaft, so lengthening drive shafts shouldn’t pose a problem. Ford’s 4.6-liter, 300-horse, 24-valve V8 would be more than adequate. (The new Shelby GT500 powerplant would be a bonus.) All the engine really needs is a little more muffler, a little less intake and a lot more purr. And there’s plenty of room at the new AutoAlliance International assembly plant in Flat Rock, Michigan to build a “real” Cougar.

If Mercury had a Cougar, it might begin to look like the brand has a future, instead of simply surviving on life-support from Ford. It’s not a question of whether or not there’s a market for a “proper” American luxury coupe; there are more than enough foreign players in this niche to prove its potential viability. It’s not a question of money; a new Cougar needn’t start from scratch. It’s a question of will. When a brand loses its luster within the Ford Empire, it lacks champions to snatch back the resources it needs to grow. In car manufacture as in life, everything either grows or dies. Over to you Mr. Bill.

When the Chairman and Chief Executive Officer of the world’s largest automaker tells his shareholders to think long-term, there’s only one word for it: sell. Yes, I know. The General got itself into this death spiral by thinking short-term: investing its precious resources in a dead genre guzzling, buying brands instead of investing in existing ones, pushing pushrods, rebadging anything that wasn’t nailed down, and so on and so on stretching back forty years. But Wagoner’s no corporate visionary. What he’s really saying is hang on boys and girls, a bunch of bad shit is about to go down.

Those of you who haven’t had their memories erased by GM’s MIB will recall that The General placed all its bets on the success of its high-profit GMT900 SUV’s. Despite a nice little takeoff, sales are flying low. The trucks are starting to pile-up at dealer lots– as is just about everything else save the Hummer H3 and Pontiac Solstice (which can’t pile up because GM still can’t figure out how to make them). In short, even Wagoner knows that it’s going to be a long hot summer. “We’ll need to be patient,” Wagoner said. “There will be some challenging months in total sales… But it will pay off in the long term.”

Wagoner’s “steady on boys” message was a tacit admission that GM's journey around the toilet bowl is gaining momentum. In May, GM’s turnover dipped 12.4%. The General’s market share shrank (again) to 22.5%. Viewed in isolation, these “results” are catastrophic. Compared to Toyota (+17%), Honda (+16%) and VW (+35.6%), it’s the Four Horsemen of the Apocalypse watering their mounts. "It was certainly a challenging month for us," GM's chief market analyst Paul Ballew admitted on Friday, with characteristic understatement.

With escalating gas prices cooling the market, sucking-up discretionary income and raising interest rates; with a rising tide of unsold GM vehicles, with nary a blockbuster in sight, with management reaffirming its decision to forgo a repeat of the Fire Sale for Everyone discount campaign, there’s no reason to believe GM sales are set for a major improvement anytime soon. "As the industry shifts to cars from trucks, that works to our disadvantage," Bellew stated. As GM’s lineup is bereft of the small, efficient cars fuelling its competition’s gains, what WILL work to GM’s advantage during these dark days?

Rabid Rick would have you believe it’s cost cutting. At the shareholder pep rally, Wagoner proudly proclaimed that GM is on track to trim $7 billion in “structural costs.” Yes, well, most of Wagoner’s “cuts” are nothing more than deferred payments. Recent union buyouts may look better than paying workers a salary and benefits not to work, but the savings aren’t as “real” as not paying them anything not to work. All those lump sums– including health care deals, plant depreciation costs and other “incidentals” (e.g. a multi-billion dollar pay-off to Delphi’s intransigent union workers)– have to come from somewhere, sometime.

While Rabid Rick says he’s “positioning GM for sustained profitability, not just short-term profits,” the only thing that can save GM from sliding into bankruptcy is… short term profits. So what’s Wagoner’s specific plan to generate life-sustaining revenue? "All brands are not created equal," Wagoner said, ignoring decades of cross-brand badge engineering. "We can turn that to our advantage." In other words, brands rule! (Who knew?) Referring to Pontiac and Buick, Wagoner said “we'll probably have fewer models under each brand and make them more focused brands."

Did anyone else notice the word “probably” in that sentence? Are we to conclude that Wagoner’s plans for these failing brands are still under development? Beyond that, Wagoner’s remark illustrates one of the most frightening aspects of his tenure at GM: an abject failure to put forth a large-scale strategy for a GM turnaround. Plant closings here, job cuts there, re-badged Opel Saturns, “value pricing,” flex fuel vehicles– there’s no overarching vision of what GM needs to become to survive and thrive. Wagoner’s constant use of the word “turnaround” tells you that his ideal is nothing more than a return to what was. It’s not even back to the future; it’s back to the past.

Clearly, Wagoner doesn’t “get it.” He doesn’t understand that The General needs something more than money to withstand the current shitstorm– a crisis he won’t even recognize in public. GM needs an idea. A bright, bold vision of a profitable future. GM shareholders may be toothless, but its “stakeholders”– suppliers, workers, dealers and customers– need that vision thing to believe that GM is better off out of bankruptcy than in. Without it, quite simply there’s nothing to be done. Wagoner’s inability to stand in front of the faithful and inspire them to aspire to reinvention condemns them all to failure.

After taking delivery of a Toyota Camry Hybrid (TCH), I toyed with the idea of de-badging it. I quickly realized my inverse snobbery might boomerang in my elitist face; reducing me to total automotive anonymity. Perhaps that's why Toyota's marketing department equipped the TCH with three "Hybrid" badges to the one discreet Camry badge tucked under the lip of the trunk line. And I suppose I should be proud to drive a clean-burning gas – electric automobile; protecting the environment, reducing oil imports and all that PC sort of stuff. Still, I can't stop the nagging feeling that I'm getting away with something…

As I fired up the GL450, I noticed that the big Merc's trip computer had begun calculating my mpg. I watched in startled fascination as the idling SUV's fuel economy began to drop from the previous night's calculation. Although Mercedes deserves props (or brickbats) for releasing such a glorious gas hog at the tail end of America's SUV craze, the dropping digits left me wondering how the GL450 could possibly rationalize this lampshade-on-the-head consumptive behavior. Even if the target market's interest in fuel economy is more political than wallet-driven, the GL still needs to stump-up some serious self-justification.

Imagine the world's best car salesman. He knows your name, buying history, automotive likes and dislikes. He knows your car: its age, condition and service history. He knows your budget and preferred finance method. He knows what car-related purchases you like: stereo upgrades, driving instruction, branded merchandise, etc. He knows when to approach you, and when to back off. He's friendly yet authoritative, completely informed about ALL automotive products and scrupulously honest. And best of all, he's a computer.

Oh sure, in an ideal world, it'd be a real person. But we live in a world where consumers can summon a new car's dealer invoice with a click of a mouse. Where anyone can buy and sell a used car over vast distances at the push of a button, for less than the cost of a classified ad in their local paper. And that means that today's car salesmen make a couple of hundred dollars per sale. For that kind of money, you get an order taker. At best. At worst, you get someone who doesn't know anything about anything who tries to hide the fact that there's only one person he hates more than himself: you.

Again, automation is the answer. To wit: I once asked a Renault exec how his employer had morphed from sad manufacturer of pathetic rust buckets to steadfast supplier of quality cars. "Robots," he replied. Once the French automaker removed as many humans as possible from the production process and replaced them with computerized assembly workers, the company could consistently create reliable vehicles. So if automation has transformed cars into paragons of mechanical virtue, why is the sales process still run by Neanderthals playing with flint axes?

To some extent, the car sales cro-magnonification has begun. Dealerships are splashing-out on "customer resource management" (CRM) software. These automated programs process sales and service data to track and stimulate the sales process. For example, when a potential customer walks into a dealership to test drive a new car, the salesman grabs his email address. When the customer walks, the salesman hands the email info to the CRM team. The dealer's computer then bombards the escapee's in-box with inappropriate come-ons– until the program eventually decides it's time for the spam to stop. OK, that's not the ideal. But it is the actual: the precise sequence of events following my last visit to a Toyota and Ford dealership.

More sophisticated CRM systems analyze service department data– mostly mileage over time– to figure out when customers might be ready for their next whip. The box flags the info for a salesman's phone call, email or direct mail pitch. Some systems also alert the salesman when their customer is in for service, to stimulate a co-incidental new car chin wag. All of them send birthday cards. Clearly, obviously, these systems suck. Current CRM software doesn't gather the right data, doesn't gather enough data, processes the data badly, responds inappropriately and, ultimately, asks lazy, unmotivated, inefficient humans to capitalize on its algorithmic efforts.

If it wasn't so ludicrous, it wouldn't be so funny. All a CRM programmer really needs to do is find the world's best car salesman (or woman), figure out exactly how they sell a car, and then get a computer to do it. Obviously, you don't want a computerized voice calling you up and asking you the same sorts of questions as your local car dealer's real-life "main man." Or do you? I get on just fine with my automated Virgin phone top-up babe. Study after study shows that automotive consumers feel that their car dealer doesn't contact them enough. No, really. They feel neglected. You never call. You never write…

Gold-plated CRM systems practice what their programmers call "data mining." The software digs through extensive customer data to find the nuggets the computer's human masters consider useful or relevant. It's an entirely inappropriate process. What's needed is "data schmoozing." CRM systems should engage customers in an endless series of interactions that allow the computer to create a precise and contemporaneous portrait of the potential customer's exact needs. They should respond to the customer's (not the salesman's) input with interesting, informative, entertaining and relevant information. That kind of CRM process would bond the customer to the computer– I mean dealer.

On the other hand, maybe automobile manufacturers should be the ones pursuing "third wave" CRM automation. After all, any dealer who engages their customers in such a lively, ongoing and information-rich conversation would have an enormous advantage over the company providing the product. In fact, the race to create an automated sales system will determine the future of the car industry. The question is: who will own the customer? As always, it will be the company with the best product– AND the best salesman.

The New York Times recently labelled GM a crack dealer for using $1000 gas cards to "addict" Californian drivers to its gas-guzzling SUV's. There are several important differences between selling a Schedule II substance to low-income drug addicts and marketing a legal product to responsible consumers in a free market. Suffice it to say, the Gray Lady's got it backwards: GM is the addict. The General is hopelessly addicted to fleet sales. Although GM has publicly announced its intention to reduce their reliance on this part of their business, it's nothing more than a junkie's promise to reform. In fact, none of the Big Three are ready, willing or able to leave their dependency behind.

There are two kinds of fleet sales: organizational and rental. In both cases, profit margins are minuscule. Manufacturers aren't overly concerned. They rely on the huge orders to increase production levels; which keep factories open, sudsidize union salaries and reduce a given model's cost-per-unit (CPU). A low enough CPU creates higher profit margins on the model's "regular" (i.e. retail) sales. The enormous volumes also facilitate all-important 'top sales' bragging rights and protect the manufacturer's Holy Grail: market share.

Selling cars to government agencies, schools, taxi firms and private companies is a slam dunk. Few local politicians or business owners want to risk ticking-off powerful [union] constituencies by buying foreign– unless the local car plant is foreign-owned. (And maybe not even then.) But the rental market is the big score: hundreds of thousands of vehicles per year. What's more, rental "sales" are actually short-term leases (usually six months). The numbers can be massaged to look even better if, say, you own the rental car company. When Ford owned Hertz, they offered themselves some mighty impressive deals; like four-month leases. That sort of turnover has an extremely salutary effect on a manufacturer's production figures.

On a balance sheet, there's nothing wrong with selling cars to yourself. From a long-term perspective, the damage is both massive and relentless. For one thing, rental cars don't disappear when their owners are finished. When "lightly used" rental cars flood the market, the vast supply of relatively low-mileage, good quality vehicles crater the model's resale value. The resulting depreciation hits retail customers hard– especially brand or model loyal buyers that trade-in their vehicle every three to five years. The chronic over-supply also reduces the possibility and profitability of competitive leasing.

The second effect is more insidious, but more dangerous: the "cheapening" of the model's name. Our old friend the Ford Taurus is a textbook example. Even before the model's "ovalization," Ford used Taurus sales to Hertz to secure the "top selling car in America" trophy. Without an inside line to a rental company, Honda and Toyota simply couldn't compete. Eventually, both automakers gave up trying; Honda made the US Accord a separate model and moved in the TL (which reduced their output enough to stay out of the running). Toyota simply bided their time, and moved further up-market.

As Mary Walton details in her book "Car", the '93 Taurus wasn't designed to out-sell Camry (mission accomplished). The new Taurus was supposed to "beat Camry" in the upper middle market. While the Taurus' execution wasn't flawless (the design was certainly challenging), its rental car reputation was the single greatest obstacle to moving the model up-market. The sort of people who would pay a premium for a premium sedan didn't even have the Taurus on their radar. Eventually the Taurus survived only to provide marginally profitable fleet sales; the retail market was practically non-existent.

General Motors also knows the drill. Many of their least inspiring models– Impala, G6, Malibu– find their primary home inside rental fleets. Their success in this less-demanding environment removes the incentive to upgrade the vehicles to compete in new car showrooms. Once the general public perceives a vehicle as a rental car, once they clock the depreciation, it's doomed. Although sales volumes indicate a winner, the rental fleets lock the models into a Taurus-like death spiral. GM claims it wants to reduce these sales, but in truth, they will have to go through a slow withdrawal. Going cold turkey on 25% of their business would be fatal.

There's no easy way for The Big Three to wean off themselves off fleet sales. One solution: design models specifically for rental fleets (the old Malibu was held over as the "Classic" for this very reason). Meanwhile, restricting fleet sales to a small percentage of retail sales is the only viable option. The move would help sustain their models' retail and resale values and increase the pressure to constantly and consistently improve their products. The Big Three say they're moving in that direction. But what are the chances struggling domestic automakers will resist the temptation to use fleet sales as a quick "fix" for slumping market share?

Last week, BMW flackmeister Dave Buchko banned The Truth About Cars from access to BMW and MINI press vehicles. Mr. Buchko wanted to be clear: the company was not responding to TTAC's criticisms of its products. The decision represented "a general concern about the tone and tenor of the site." More specifically, BMW objected to my characterization of the Subaru Tribeca's grill treatment as a flying vagina and our "inappropriately harsh" review of the Lexus IS350. So, BMW doesn't mind us calling the new M5's shifter the world's worst gearbox, but we can't mention female anatomy or wail on their opponent. Are you getting this?

I'm disappointed. I was looking forward to launching a retaliatory campaign based on our right to call it like we see it. You know: 'BMW can't handle The Truth!' But how do you fight a company that cuts you off from its press fleet because its corporate leaders object to the word vagina, and the fact that we preferred their products to their competitors'? Following Mr. Buchko into the rabbit hole, I tried to negotiate a solution to this bizarre situation. During our most recent phone call, I told Mr. Buchko we wouldn't use the words "vagina, penis or testicles" in any future posts and [almost] promised to shower Lexus with love the next time 'round.

No deal. The best Mr. Buchko could offer: BMW would "monitor the site" and "get back to us." I rejected the non-offer and, well, vagina. While I do not for one moment suggest that BMW has any obligation to provide The Truth About Cars (or anyone else) with press cars, these guys are both arrogant and insane. That fact was pretty obvious before the ban– when Mr. Buchko gave me a vigorous tongue-lashing for suggesting that iDrive was the worst thing to ever happen to a BMW (this was pre-M5). But now, by banning us over word choice and a Lexus review, BMW has conclusively proved that they don't understand PR, the new media or their customers.

Hold that thought. What's wrong with the word vagina? It's not one of the seven words you can't say on TV; it's a perfectly acceptable term for a female's primary sexual organs. And what's wrong with comparing the grill treatment of the Subaru B9 Tribeca to a flying vagina? Ever since Sigmund Freud's "Drei Abhandlungen zur Sexualtheorie" met Jaguar's E-Type, journalists have called sports cars phallic symbols. Is the BMW organization so repressed and patriarchal that it can't tolerate the mere mention of female genitalia? The fact that Buchko couldn't bring himself to say the word 'vagina' indictates the full extent of the roundel's psycho-sexual problems.

C'mon guys, the vagina is ground zero for every human that's ever walked planet Earth. It's a place of beauty and pleasure for billions of people. [FYI: Hawaiian legend contains a story about a flying vagina or 'kohe lele."] I reckon the Subaru B9 Tribeca should fly its vagina with pride. And anyway, you'd think that BMW has more important things to do than obsess– for ten months– about a sexual reference on a relatively obscure website. Oh wait; TTAC published the Lexus IS350 review during this interregnum (on December '05). And what was our unpardonable sin there? Dunno. The Lexus review applied the same level of critical examination to the IS350 that we'd previously and subsequently applied to BMW's graciously-loaned press cars: the M5, 325ix Sports Wagon, 325i, 750i, M3CS, 645i Coupe, 645ci Convertible and 530i.

I find it inconceivable that a German car manufacturer would risk public disapproval to punish a website for using a "bad word" and protect their arch rivals. [Note: Toyota didn't object to the IS350 review, and continues to provide TTAC with press cars.] In fact, if you want a textbook example of how not to run a PR department, this is it. BMW is now on record as the company that freaks-out at the word "vagina"– inviting both ridicule and indignation from their highly-educated core clientele. The ban also reveals BMW as wimpy competitors, or paternalistic saps. Does anyone seriously think Toyota would return this unsolicited favor?

This thing is three kinds of stupid. In a free country, BMW can't stop a website from publishing the word "vagina," criticizing whomever it pleases and finding other ways to get behind the wheel of one of their products. This we will do. And rest assured that we will not review these cars any more harshly than we did before the ban. The Truth About Cars will not compromise its basic principles for anyone, ever. Meanwhile, I'd like to ask you a simple question: do you feel comfortable doing business with a company that behaves this way? Please send your answer in an email to <a xhref='mailto:dave.buchko@bmwna.com'>dave.buchko@bmwna.com</a>. CC us here, and we'll publish the most entertaining and informative examples.

General Motors is convinced it can't afford to kill Buick. If it could, it would; but it can't, so it won't. So now what? Clearly, the Lucerne and LaCrosse (improvements though they are) aren't winning a great many brand converts. A radical re-think is in order. It's time to drop any pretense that Buick can possibly appeal to anyone younger than 70, and drink fully from the golden goblet of Metamucil. If GM insists upon keeping the marque on life support, what better way to do so than by wholeheartedly crafting a car designed for buyers close to employing the same?

It might not be the sexiest concept, but there's nothing intrinsically wrong with The General developing a brand that sells itself as "The Pensioner's Best Friend." America's growing pool of senior citizens is blessed with vast repositories of disposable income. And because the majority of the American automobile industry is off chasing the empty pockets of youth, it's an entirely unoccupied brand space, ripe for the plucking. Toyota made overtures toward the segment with vehicles like its Avalon. Ditto Cadillac's DTS. But the unintended adopt-a-grandparent success of the Scion xB and Honda Element prove that there's an important, unfulfilled niche. Someone needs to pull the lever full-tilt on the wrinklies' slot machine.

With a little development, Buick is the logical choice. "Beyond precision" lies simplicity: a brand offering vehicles with cost-effective innovations and equipment levels. Cataract-friendly gauges at the heart of basic instrumentation. Oversized switchgear. Heated, cooling, massaging seats that swivel to ease entry and exit (remember those?). Extra wide door apertures with reinforced hinges to ease entry and exit. OnStar. Electric everything, with power sliding trunk floors for easy loading and unloading, and power pedals within a Rockport's reach. Adjustable warning chime/turn signal volumes. Electronic medication reminder timers. Run-flats. Oversized sunglasses bins for granny's favorite set of Terminator shields. Two words: Rascal storage.

Every possible safety feature should be standard, from lane-departure warning systems to self-parking. Electronic nurses? Loads: SRS + ABS + EBD + DSC + ASR + BA = AARP. The ordering and purchasing experience must be simplified as much as possible. This author has railed against illogical options bundling, but the geriatric niche is one segment where simplified trim levels actually make sense. If higher-end features like satellite navigation are deemed a marketplace necessity, so be it— but designers must ensure that they're simple, intuitive designs, preprogrammed with relevant waypoints— drug stores, casinos, cat hospitals and Cracker Barrel restaurants, say.

These New Old School Buicks needn't be boats—there's a reason why vehicles like Chrysler's PT Cruiser and Scion's xB have met with open checkbooks among the septuagenarian set: their boxy shapes offer arthritic-sympathetic ingress and egress, upright posture, good visibility and room for potting soil, golf clubs, respirators, walkers, etc. The appeal of these econoboxes proves that modern seniors aren't necessarily attached to the baroque styling that typified the cars of their collective past. Over time, this will become increasingly true, as huge numbers of baby boomers turn in their Ford Five-Hundreds and Chevrolet HHRs such in search of vehicles to take them through their golden years.

And let's not forget the possibility of profit-rich cross-product marketing opportunities. Buick should offer branded walkers and wheelchairs and such, specially designed to fit in their vehicles. These Buick products ought to extend beyond simple accessories– GM could doubtlessly partner with a supplier for bespoke power-lifting orthopedic seats of varying foam density, size and support (for a hefty premium, of course). Leases could be configured with total free maintenance packages for the term of the agreement up to, and including wear items like brakes and tires.

Marketing would be a slam-dunk. Beyond having senior citizen notables as spokespeople and seeking approval stamps from various health organizations, if done correctly, GM could once again project the image of a benevolent corporation. "We respect our elders, and we're doing something to help them: offering seniors the safest, most convenient vehicles for their specific needs." Further, by catering directly and expressly to pensioners, GM's other divisions wouldn't have to compromise their design bogeys to accommodate a percentage of older buyers. They'd be free to pursue their own brand-specific identities (Cadillac and Chevrolet, namely).

We at TTAC are all in favor of tightening the frequency and criteria of testing procedures for senior licensure. Yet your (occasionally) humble narrator recognizes that America's increasing contingent of pensioners won't stand for having their personal mobility stripped wholesale. Perhaps the next best thing would be to put them in a vehicle that shouts to the rest of the motoring masses: "Warning! Elderly Person On Board!" A Buick crest on the rump of thousands of wayward, left-lane clogging sedans would give the rest of us a much-welcome heads-up, and provide life-sustaining income for a once-loved brand.

When Bob Lutz launched the new-ish Chevrolet Tahoe, GM's Car Czar claimed the SUV and its platform partners would sell to a core group of customers who need (or at least desperately want) the size, power and towing abilities of a traditional American truck. At the same time, Lutz acknowledged that overall SUV's sales were shrinking. Unfortunately, the press neglected to explore the corollary: GM's ability to maintain SUV profits depends on conquest sales from existing owners. Never mind the Dai-san (Toyota, Honda, Nissan) or the "Crisis" Corporation. There's only one way GM can generate life-sustaining lift from this profit-rich segment: hit the weak man. Ford is Job One.

In fact, GM and Ford are locked in a Detroit Death Match. Both companies' finances are in tatters. Their market shares are shrinking. Layoffs and closings are spreading throughout their respective empires. A Delphi strike threatens to shutter their assembly lines. Impossible pension and health care costs are eating into profits. They pay thousands of workers not to work. The unions can't or won't play ball. There's not enough money to invest in new products. Their dealer networks are bloated. Ailing brands are dragging them down, but they can't afford to cut the deadwood. It's like the old joke about the man fleeing a bear who nearly trips over his companion, who's putting on a pair of running shoes. "Are you crazy?" he yells. "You can't outrun a bear!" "I don't have to outrun the bear," his former friend replies. "I just have to outrun you."

Ever since The General's bankruptcy stopped being a paranoid fantasy, GM CEO Rick Wagoner has insisted that Chapter 11 is not on the horizon, or even in play. While GM could use Chapter 11 to cut pay, pensions, health care, brands and dealers, Wagoner claims the move would fatally damage GM customers' trust (such as it is). But, if Ford went to the wall first, broke the UAW's back in court and jettisoned its excess dealers, GM could demand the same treatment from the unions and the courts. GM would enjoy most of the benefits of "re-alignment" without damaging its reputation AND scoop-up market share from its prostrate rival.

Seen though this lens, it's possible that Rick Wagoner's otherwise inexplicable "steady as she goes" strategy reflects a deeper understanding that GM is fighting a war of attrition against its cross-town rival. If so, the sides are evenly matched. Ford has a better pickup, arguably a better car line and better foreign brands (all solid except for ailing, arthritic Jaguar). GM has better SUVs, a more robust luxury line and sheer size. At the end of the proverbial day, these two automaking giants are in such similar straits that Ford (and to some extent Chrysler) feels obliged to equal or better every GM incentive, discount and sales gimmick. Employee discounts, gas cards, zero per cent financing, cash back– the hits to the bottom line keep happening.

Of course, these incentive wars are a dangerous game of "chicken.' The endless discounting has not only damaged all hope of profitability, it's dragged GM and Ford deep into discount car company territory, shattering their once-proud reputations for high-quality products. What's more, the campaigns are only working relative to each other; while GM and Ford (and Chrysler) fight each other over scraps, Dai San continues their slow, inexorable increase in overall US market share. The rot may become so bad that neither company could find their way back– even after bankruptcy levels the playing field.

Besides, the "what's good for the goose is good for the gander" principle has no basis in law. Who's to say a Ford Chapter 11 would force the all-powerful labor unions to be more conciliatory towards GM when their contracts come up for renewal in '07? Why would the myriad of state courts involved in dealership agreements allow a solvent GM to dump its dealers just because a federal bankruptcy judge bestowed this advantage upon a stricken FoMoCo?

If Wagoner and his team are thinking Who Laughs Last, they may have it exactly backwards. The first domestic carmaker to file for bankruptcy could well be the first company to fully recover. Ford as much as admitted this when its quarterly statement listed GM's bankruptcy as a potential competitive threat. So why hasn't either company simply bitten the bullet and filed first? As always, it's about character. Rick Wagoner sees himself as GM's savior. He doesn't want to be the captain who went down with the ship. Billy Ford feels the same way. But events (and their own incompetence) are conspiring against them. Sooner or later, both men are bound to learn that pride goeth before a fall.