China’s Chongqing Changan is entering the lion’s den. The Chinese joint venture partner of Ford, Suzuki, and PSA will open a research center in Detroit and draw from the rich talent pool. Changan will become the first Chinese automobile company to establish such a center in the US, Gasgoo says. (Read More…)
Occasionally, when talking to other car folks, I’ll hear, “well, you live in Detroit”. It can mean different things. Sometimes it’s an accusation of jingoist bias in favor of the domestic automakers. I plead guilty in not wanting to see lots of my neighbors and customers unemployed. Other times, it’s more wistful, more envious. For a car guy, Detroit can be Mecca and nirvana on Christmas morning with a cherry on top. I don’t have to fly in for press events at the Big 3 and because there are so many automotive writers around here, even the foreign brand press fleet is stocked pretty nicely.
Though not as common as they once were, you can still take a factory tour at Ford’s [not quite so] giant [anymore] Rouge complex, and while you’re in Dearborn it’s definitely worth your while to visit the Henry Ford Museum. Just one note, you won’t find it listed under that name. A few years ago, for some insane marketing reason, the Henry Ford Museum & Greenfield Village decided to rebrand itself, choosing “The Henry Ford”. I suppose that goes over big with museum curators – I’m sure that everyone in Manhattan knows what the Guggenheim is, but in a region that has hospitals and schools named after Henry Ford (I & II), dropping Museum from the eponymous Henry Ford, is just confusing and a little too precious.
We can’t pretend to be overly enamored with former “car czar” Steve Rattner, who oversaw the auto bailout before being disgraced for his role in a New York pension fund pay-for-play scandal. Still, the guy was in the thick of things during last year’s negotiations over Detroit’s rescue, so he knows where the bodies are buried. And in his new book, Overhaul, which has been released to select outlets ahead of its October 14 publication, he tells a whole lot of stories about the months of bailout proceedings that led to the rescue of GM and Chrysler. Of course, Rattner has an agenda in all this, namely proving that
so he’s not necessarily an unbiased source. But with grains of salt at the ready, let’s dive into his spilled guts and see if what secrets lie beneath.
One of the reasons why I started writing for TTAC was that, as a lifelong resident of the Detroit area I was tired of watching people with little direct knowledge of this region using stereotypes and caricatures to demean my neighbors. Typically people outside the region will describe Southeastern Michigan as a place of unemployment, indifferent workers, crime and racial disharmony. As with most prevarication, there’s an element of truth to those stereotypes, but it’s not the whole truth.
I can understand finding that kind of behavior in comment threads online, but it’s distressing when what is generally considered the leading newspaper in the country, the New York Times, lazily relies on a ‘usual Detroit template’ when covering an event in this area.
Editor’s Note: Part One of Michael Karesh’s review of Sixty To Zero can be found here.
Journalists write stories. A coherent story is a partial truth at best. If it’s portrayed as the whole story, it’s a lie.
In Sixty to Zero, veteran auto industry journalist Alex Taylor III provides an unusual level of insight into the relationships between top auto industry journalists and the executives they cover. He acknowledges getting too close to these executives more than once, and blames this for several embarrassingly off-base articles. But even in his most self-reflective moments, Taylor fails to recognize an even larger source of distortion.
With Sixty to Zero, leading auto industry journalist Alex Taylor III claims to provide “an inside look at the collapse of General Motors – and the Detroit auto industry.” The book is well worth reading, but not because it actually provides this inside look. Instead, this book, atypically as much personal memoir as history, lets us peer inside the life and mind of a top auto journalist. A close read suggests why such journalists provide little insight into what really goes on inside the auto companies.
Collectively, the the Detroit Three have enjoyed precisely one market share turnaround in the last several years: Ford in 2009. This year, Detroit’s market share looks downright stagnant. Chrysler’s got a tiny bump going on, but Ford’s lost its fizz and GM is skidding bottom… at best. On the other hand, if this graph is just too gloomy for you, hit the jump for one of the first glimmers of (market share) hope for Detroit in years.
I understand the economic argument for the off-shoring of production, but I think the practice is reprehensible. U.S. automakers have benefitted greatly from federal largesse and should feel morally compelled to retain and create as many domestic jobs as possible.
As one of the strongest proponents of the Detroit Bailout, Rep John Dingell (D-MI) carries some weight when he makes statements like this. But how can Detroit rise again by ignoring the undeniably strong “economic argument” for outsourcing? In a Bloomberg BusinessWeek feature, Thomas Black shows why production numbers are on the rise in Mexico, and makes the case that the Detroit automakers will only increase their reliance on Mexican production when they are free from government ownership.
To be perfectly honest, I wrote about half a post on GM’s decision to give Detroit Tigers pitcher Armando Galarraga a new Corvette after he was robbed of a perfect game by a bad call, before deciding not to run it. Why? Well, the story is classic Detroit: Galarraga’s victimhood is exactly the image GM would like to associate itself with (remember, everything was going fine before the credit markets collapsed), and The General owed the Tigers anyway because of owner Mike Ilitch’s decision to not charge GM for ad space on the stadium’s fountain when it was in bankruptcy (Ilitch added free Ford and Chrysler ads in the interest of fairness). In short, there was plenty of room for some trademark TTAC cynicism… and yet I couldn’t quite bring myself to twist the knife.
The Standard Of The World meets cold reality, as the prominent Detroit-area Cadillac dealer, Dalgleish Cadillac, calls it a night. The Detroit News, which eulogizes the dealership “with bitterness, hope and history bound together,” reports that the Dalgleish Cadillac building will become a high-tech business incubator run by Wayne State University’s Tech Town.
Hey, we’ve finally found someone who believes in the Volt and Chrysler’s alleged new products. Too bad he’s from the government that owns 60 percent of GM and 15 percent of Chrysler… and he can’t explain his optimism in anything but the broadest platitudes. Did Transportation Secretary Ray LaHood properly disclose his relationship with the state-owned automakers per FCC standards? Probably not. But that’s OK, since few probably took him seriously to begin with.
Ok, so not every Saab owner made it to the “Save Saab” rally outside of GM’s headquarters today… but local Detroit businesses did report shortages of pipe tobacco, leather elbow patches and quirk. All kidding aside though, is there a better illustration of the blind passion that automobiles so relentlessly inspire? These folks had to know that 20-odd people with signs wouldn’t make a lick of difference to Saab’s fate, but dammit, they drove to Detroit anyway. From as far away as New Jersey, Kentucky and Iowa, no less. Somehow that makes the inevitable schadenfreude seem a little less satisfying.
To qualify for Japan’s cash-for-clunker program, new vehicles must meet the 2010 fuel economy standard of 35.5 mpg, making 87 percent of Japanese-made vehicles on sale in their home market eligible for the credit of up to $2,800. In fact, the Japanese program doesn’t even require a clunker (MY 1996 or older) to trade in, although without giving up an inefficient vehicle, the best credit available is a mere $1,132. But the American Automotive Policy Council calls these rules “unfair,” telling the Freep:
We urge the U.S. government to make clear that it cannot tolerate this outright discrimination, particularly at a time when it has provided substantial direct financial support for Japanese automakers in this market
Huh? Is the AAPC talking about America’s cash-for-clunker program, which (like Japan’s) sent Honda and Toyota sales soaring? Or the $1.6b DOE “ATVML” loans that Nissan got, which were dwarfed by the same program’s generosity towards Ford? Or perhaps the $82b+ TARP bailout that… oh wait, that all went to Detroit. Ok, let’s forget about America’s “substantial direct financial support for Japanese automakers” for a second and figure out just how unfair this Japanese program is.
The Freep is reporting that GM’s Renaissance Center headquarters could be at risk if so-called “retention tax credits” aren’t amended. GM is consolidating more of its workforce at its Warren Technology Center, and 1,500 of the RenCen’s 4,000 GM workers are reportedly making the move out of downtown. The remaining 2,500 workers would stay only if a Michigan Economic Growth Authority “retention” tax credit makes it worthwhile. The necessary amendments to this tax credit have been made, but MEGA still has to approve the package. A memo to the Growth Authority reveals the stakes:
2,500 is the maximum that they can also take for this portion of the credit. General Motors has submitted an application stating that the headquarters is at risk without this credit.
As we wait for October sales to come rolling in, I’d like to take advantage of the calm before the storm to update our faithful readers on the wild week to come. Tomorrow I’ll be flying to Detroit to cover Chrysler’s five-year product and business plan. Luckily though, the trip will not be limited to a six hour presentation on “Fiat’s fuel-efficient engine technology” and sundry Pentastarred optimism. We’re also getting the opportunity to interview a certain Mr Ian Callum, chief designer for Jaguar. Do you have any burning questions about the new XJ, the XF or Jaguar’s new styling direction? Let us know and we’ll be sure to ask for you. We will also be covering the roast of Bob Lutz, so be sure to tune in for a report on the best jokes of the evening (although really, nobody expects them to improve on Farago’s effort). Though we’re thrilled to be able to offer a week of fresh reporting, interviews and jokes about GM’s Vice-Chairman, making it happen might require a slightly slower pace of content this week. Luckily Robert Farago, Bertel Schmitt, Paul Niedermeyer, Sajeev Mehta and other TTAC faves will be stepping up to keep the flow of news, commentary and analysis steady. So get ready for a big week, and take a moment to tell us what you most want to hear from Mr Callum, and the New New Chrysler. And thanks, as always, for your tips, comments and support.
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