Heads Could Roll (Finally) at GM

Could Whitacre (right) oust Henderson?

This is what I like to see!

Finally, we’re getting a little take-charge-or-get-out attitude from a boss at GM. Rick Wagoner sure couldn’t do it, and now Fritz Henderson doesn’t seem to have the ability, or desire, to step up and lay down the law either.

I’ve been thinking GM is doomed to repeat bankruptcy someday, only next time it’ll be the liquidation kind. That’s the most logical outcome when leaders refuse to hold their employees accountable for a company’s products, performance, and profits, something Mr. Henderson has thus far not publicly done.

I guess it’s easier to sit back, remain complacent, and assume the government will come to the rescue again and keep the cozy exec positions at GM intact.

Well, thank goodness for Ed Whitacre, Jr. GM’s new chairman has delivered a harsh, blunt, and very much needed message to his executives: Make changes quickly, a lot of them, or face the consequences.

According to the Detroit Free Press, Whitacre, in a meeting with executives, was

“frighteningly direct” in conversation, making it clear that every top executive’s job at the automaker is on the line, and that heads could roll in the next two or three months if there’s not significant progress in vehicle sales, market share and profitability.

So in just three short months we’ll see one of two things from the General: Big changes or heads rolling out the front door.

There is a third possible outcome, I guess: that Whitacre’s threat is nothing more than a bluff to inspire change that is very unlikely to actually happen.

My money’s on executives getting fired soon and Whitacre finally reversing the direction of GM. Anyone think I’m wrong?

-tgriffith

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Clunkers: On Once Again

On again, off again, the CfC (Cash for Clunkers, or CARS, as the government calls it) program will be renewed, predicts Senate Majority Leader Harry Reid. This after a pep-talk lunch for the Democratic Caucus hosted by the President. A subsequent statement from Sen. Jim DeMint (R, S.C.) allowed that he, one of the bill’s noisiest critics, wouldn’t block it.

It looks as though they will vote very soon (by the end of the week), because public pressure to renew the program is intense. Everybody wants to find good news here. Ford reported

a 1.6% increase in sales from last July, saying several models such as the Ford Fusion sedan had benefitted from the program. Subaru of America said its sales rose 34%.

Ford also said it had run an analysis of cash-for-clunkers trades, estimating that the typical trade-in had fuel economy that was 9 m.p.g. less than the new vehicle sold by the program. At that level, Ford estimated consumers who bought new vehicles would each save about $1,000 a year in fuel costs.

Notice that the word “estimate” is used twice here. Dealers, or most of them, had stopped accepting clunkers on trades

because they were not confident that there was any money left from the original $1 billion. Dealers have mostly been advancing the amount of the rebate, $3,500 to $4,500, to their customers and waiting for repayment from Washington.

The dealers believe that about 250,000 cars have been sold on that basis, but data entry has lagged sales. [Transportation Secretary] LaHood said on Tuesday morning that 157,000 transactions had been entered in the computer system, with a rebate value of $664 million.

That, of course, is not too shabby as a stimulus program, albeit a very expensive one per trade. But many people—Senators and ordinary folk—complain bitterly that this is just another unjustified handout to the auto industry. Other Senators, namely Feinstein and Collins, have dropped their opposition to the mileage requirements.

For what it’s worth, yours truly thinks it’s a gross handout (yes, another one), and it should have had more rigorous mileage requirements to get the really bad cars off the road. Well, I’ve said all this before, but now there’s a stampede to get CfC renewed because—as with any handout—people always want more.

Politically, there was no way the Senate could turn this one down. Do you agree?

—jgoods

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Another PR Triumph for Chrysler

The guys from Cerberus, Chrysler’s majority owner, have been keeping a very low profile lately, and so has Chrysler Financial, major player in the company’s consumer and dealer lending. Now, however, CF is on the hot seat because of a story the Washington Post broke yesterday.

A condition for granting the Treasury Department’s $750 million loan was that executives sign waivers regarding their compensation, which some apparently refused to do. When Treasury gave Chrysler $1.5 billion in TARP funds back in January, conditions were less rigorous, and there were no limits set on executive pay,which is now one hot potato. Congress is still working out guidelines on the issue.

So in Chrysler’s defense, it appears the execs were being asked not only to sign away their rights to sue at a later time, but also to sign “without knowing what specific limits the Treasury might set.” Jgoods, PR counsel extraordinaire, would have recommended the company play up exactly that side of the story, that their folks were in effect being asked to sign a blank contract.

Treasury withdrew the offer, and so the company is getting hammered here and here—not only because their execs look like greedy pigs, but also because Chrysler went on to issue this ridiculous statement:

Chrysler Financial has determined that it has adequate private capital funding to cover the short-term needs of our dealers and customers and as such no additional TARP funding is necessary at this time.

They then went out and borrowed money from private banks, Citigroup and J.P. Morgan among them, and paid a higher interest rate than Treasury would have charged. So some draw the inescapable conclusion that they were obviously willing to pay more to avoid the government’s conditions.

Now comes a story today saying GM could get some $5 billion more from the federal government and Chrysler $500 million. The latter amount would also flow to include Chrysler Financial.

I think the government needs PR counsel, desperately.

What do you think of this avoidable mess? a) Chrysler just can’t win when public opinion is so stacked against them. b) Chrysler Financial is run by knaves and fools. c) Keep the government out of financing loans to automakers.

—jgoods

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Height of Dumbness Video Awards

You didn’t know it, but today is Dumb Car Video Day. We think it’s an especially good way to bring on the weekend, and so here is Hyundai’s really stupid “tribute” to the Mustang’s 45th birthday.

Then, for your viewing pleasure, we have dancing girls festooning the Alfa 8C Spider. Frankly, we think the car is better looking than the girls, and it certainly has better moves.

Finally, the smart fortwo, which we like, has been cruelly subjected to all kinds of tuning, hotrodding and pimping out. Here comes more noise and tire squealing, to the crowd’s delight. IIHS’s recent crash tests, one of which involved a fortwo, might have pleased them even more.

So, have fun this weekend, and give us your vote on which of these dumb videos deserves first prize.

—jgoods

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Car Names: The Good, the Bad and the…What?!?

The Volkswagen Tiguan is a perfect example of it.

I’m not talking about utility or design or even precise German engineering. I’m talking about the fine art of automotive naming.

Never heard the word Tiguan before? That’s kind of the point. Making up words is a strategy some carmakers occasionally use so they can attach whatever image they want to a new vehicle.

In Volkswagen’s case, the word Tiguan is a combination of “tiger” and “iguana,” though it’s not entirely clear yet what image they hope to achieve with that odd combo. (I’m guessing it has nothing to do with hunting tigers or lounging in the sun on a rock.)

Sometimes a carmaker aspires to connect their vehicle to an exotic location, such as Malibu, Riviera, Outback, Aspen, Tundra, or Tahoe. Toyota apparently has a thing for the third-biggest city in Washington: Tacoma.

The makers of the Taurus, Aires, Equinox, Eclipse, and Solstice might be trying to connect with the whimsical astrology set.

Then there are names that go after Mr. Tough Guy: Titan, Pathfinder, Fury, Charger.

Isuzu Mysterious Utility Wizard

These are all fine names that serve their purpose well. But what about names that should have never been plastered on the back end of a car? The Probe (though perhaps appropriate on a rear end), the Gremlin, the Pinto, the Vibe… not exactly words that conjure up images of efficiency, safety, or performance.

One of my favorite things about car names is their sometimes unfortunate translations into foreign languages, including the Toyota Deliboy, Isuzu Mysterious Utility Wizard, Honda Life Dunk, and Daihatsu Naked.

What do you think are the best and worst car names ever?

-tgriffith

Scanning the Auto Blogosphere

The Mindset

Should I start with the good news or the bad news? Let’s get the bad news out of the way first, since I found a couple of bits of good news.

Yesterday many auto bloggers commented on January’s auto sales numbers, which were abysmal. Chrysler won the booby prize by posting a 55% drop in sales compared to last January, but GM and Ford didn’t fare much better, posting drops of 49% and 39% respectively. Colin Mathews at TheCarConnection posted a quick-and-dirty summary featuring a totally appropriate photo - and the word “portend” in the headline. Edmunds’ AutoObserver posted a much longer and more-detailed piece that highlights Hyundai’s 14% sales increase and includes loads of quotes from auto-biz bigwigs as well as some interesting details on how the Big Three’s changing approach to fleet sales made their numbers even worse.

Okay, now for some good news, which also broke yesterday. The U.S. Senate passed a bill that will allow taxpayers to deduct sales tax and interest for new-car puchases made between November 12, 2008 and December 31, 2009. The bill includes ceilings on the cost of the car and total household income, but the National Automobile Dealers Association, which pushed strongly for the measure, guesses it will save buyers about $1,500 on a $25,000 car. Autosavant has more details and notes that many in the industry would prefer to have seen a bigger financial incentive.

Another bit of news most car fans seem to consider good came from BMW. American Chris Bangle, design chief for the German automaker, announced his departure from the company to “pursue his own design-related endeavors beyond the auto industry.” (???) While Bangle was undoubtedly hugely influential, having designed the current 1-, 3-, and 5-Series and last-generation 7-Series as well as having overseen design of the new MINI, many hardcore fans didn’t appreciate the distinctive BMW rear ends that came to be known as “Bangle Butts.” As you shouldn’t find surprising, the lads at Top Gear posted a particularly cheeky notice yesterday.

Now that I’ve gotten the good and bad news out of the way, I’d like to share a couple of stories on upcoming cars I found interesting. First, the Mindset (above) has joined the parade of puzzling-looking new electric cars. It looks to me like a mash-up of a Karmann Ghia, a stumpy El Camino, and a rickshaw, but Autoblog says working prototypes have apparently hit the roads in Germany, and the company hopes to sell 10,000 in its first year of production.

I found a few more odd-looking but highly efficient new car designs in Wired’s recent Autopia post on the Progressive Automotive X-Prize, a $10 million prize for the first mass-production car that achieves 100 miles per gallon. I had already seen the radical Aptera, but I was pleased to note the Avion and the Viking 45 look pretty much like super-aerodynamic sports cars, rather than spaceships or robotic rethinks of the Honda CRX.

-Steve Halloran

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M Sport Trim Does Not Equal M1

The BMW 1-Series has been on sale in the U.S. for more than a year. It got great reviews here and elsewhere, and by all accounts would probably be selling like hotcakes if we didn’t have a financial meltdown on the menu.

Now, to get you to eat more, the company has put out a sport trim package for the coupe and the convertible, available in 128i and 135i cars. This is the “flash” package, to be distinguished from the standard sport package, and at all costs to be distinguished from the M-Series cars (M3, M5, etc.) which are hotted-up sports versions, à la AMG cars from Benz.

Here’s what 135i buyers get for an additional $1,300 bucks (for the 135i coupe, $1,200 for the convertible):

• M door sills
• M footrest
• M gearshift lever
• M steering wheel
• M wheels
• Available with an M exterior color
• Anthracite Headliner (not available for convertibles)
• Aerodynamic package

Aw, come on, I want the anthracite headliner in my convertible. Then, if you’ve got more money to spend, you can get these options:

• Anthracite Headliner (coupe only, but I thought you listed it as included in the above package??)
• Shadowline Trim
• Sport Seats
• 18″ M Wheels Style 261 M, as illustrated here:

The M sport package has been available to European buyers since mid-2007, but now, sports fans, you can get the M look on the 135i and 5-Series beginning with January production. In 2009, apparently all the other models will get the M treatment (if you pay for the privilege).

If I understand all this correctly, your M-money buys you a café racer package which will do absolutely nothing to improve your car’s performance, but will badge it as an ersatz-M vehicle. The sports seats and 18” wheels, which will indeed help you drive better, presumably cost a bundle more.

BMW has gone the typical route of inviting you to tart up your new car and in the process confused its own branding with the M-Series. This seems to me an especially dumb move, since they produced something very worthwhile in the 1-Series. It can and should appear without the lip gloss.

Should BMW build us a new M1 (not the old 1970s version by that name) and stop confusing the issue? I think so - what do you think?

—jgoods

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