Video: IAF Hits Rocket Launchers

Amazing video from Israel's air force showing Hamas' rocket launchers being destroyed on the ground.



These primitive rockets, with no guidance abilities, are being launched wildly into Israeli towns. They are a classic terror weapon, like the buzz-bombs of the Luftwaffe.

Video: Johns Hopkins Mousetrap Car Slalom

Remember that mousetrap powered car project you had to do in high school physics class? At Johns Hopkins University, engineering freshmen have to go the next step and make a mousetrap car that does a slalom and then drives straight to the finish line. Video below, hat tip to If It's Got An Engine. When I was in school, none of my engineering professors were as cute as the one in the video.

GMAC Bank

I was looking around at who had the best CD rates in our ever-lower interest rate era, and I found that GMAC Bank has very nice rates, 4% for 1 year, compared with the average of 2%. I am planning on taking them up on it. 4% 12 month CDs are not growing on trees right now.

Now, before you shout that GMAC may go bankrupt, and eat my deposits, know that GMAC Bank is FDIC insured. So even if GMAC did go bankrupt, and GMAC Bank is a division of GMAC, FDIC would step in, and in a few days I would have my money back.

This is in contrast with the GMAC Demand Notes (5.25%) or Ford Motor Credit's Interest Advantage (3.9-4.2%), which are unsecured loans directly to the companies. If you are invested in GMAC Demand Notes or Ford Motor Credit Interest Advantage, you should re-evaluate your tolerance for financial risk right away, because I am guessing that you are investing money you consider "safe", but what you are buying is basically a junk bond.

And, by putting money in GMAC, I can help GM by providing badly needed cash to their lending arm, and helping support the Detroit auto industry.

There are some downsides to GMAC Bank. It are online-only, so if you want to be able to talk to a human being about your account, the only option is the telephone. It also doesn't support direct connection through Quicken or Microsoft Money, if you want to download transactions you have to use the manual download feature on your account page.

Note: GMAC did not sponsor this post or influence it in any way.

Windshield GPS MN

Did you know that it is against the law to mount accessories (such as GPS) to the windshield in Minnesota, and recently was in California?

Read here about Minnesota.

California law changes in January 2009 to allow GPS units, but they must be located at the lower left or lower right corner of the winshield.

In other news, Minnesota is considering a law to require Minnesotans to tie their shoes with double-knots, to prevent accidental tripping.

Star Wars Republic Commando On Vista

I recently bought Star Wars Republic Commando, a Lucas Arts squad based shooter. It wouldn't run on my machine ("SWRepublicCommando.exe has stopped working").

I got it running by doing two things: first, I set SWRepublicCommando.exe to run as administrator. Second, in the game, under the graphics settings, I set "bump-mapping" to low.

New Taurus Spy Photos

Autoblog has some good spy photo shots of a modestly camouflaged 2010 Taurus.
The interior looks nice, and looks like it has a lot in common with the MKS interior (notice the steep rake of the center stack). Also notice the Sony audio system.

Photos courtesy of Autoblog

See all pics here.

This is a crucial product for Ford, after the flabby sales (<100K annualized) of the current 500/Taurus. The Taurus should be Ford's flagship. It looks to me like it will be a contender, though we don't know what will be under the hood yet. Will it be the 3.5L V6 from the Edge and Flex, or will it be one of the GTDI engines, like the upcoming 3.5L Ecoboost?

It is also quite a bit more exciting to look at than its closest rival, the Toyota Avalon (yawwwwn).

The Bridge Loan Terms

Here are the terms of the bridge loan announced by President Bush this morning.

Fact Sheet: Financing Assistance to Facilitate the Restructuring of Automobile Manufacturers to Attain Financial Viability

Purpose: The terms and conditions of the financing provided by the Treasury Department will facilitate restructuring of our domestic auto industry, prevent disorderly bankruptcies during a time of economic difficulty, and protect the taxpayer by ensuring that only financially viable firms receive financing.

Amount: Auto manufacturers will be provided with $13.4 B in short-term financing from the TARP, with an additional $4 B available in February, contingent upon drawing down the second tranche of TARP funds.

Viability Requirement: The firms must use these funds to become financially viable. Taxpayers will not be asked to provide financing for firms that do not become viable. If the firms have not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury.

Definition of Viability: A firm will only be deemed viable if it has a positive net present value, taking into account all current and future costs, and can fully repay the government loan.

Binding Terms and Conditions: The binding terms and conditions established by the Treasury will mirror those that were voted favorably by a majority of both Houses of Congress, including:

• Firms must provide warrants for non-voting stock.
• Firms must accept limits on executive compensation and eliminate perks such as corporate jets.
• Debt owed to the government would be senior to other debts, to the extent permitted by law.
• Firms must allow the government to examine their books and records.
• Firms must report and the government has the power to block any large transactions (> $100 M).
• Firms must comply with applicable Federal fuel efficiency and emissions requirements.
• Firms must not issue new dividends while they owe government debt.

Targets: The terms and conditions established by Treasury will include additional targets that were the subject of Congressional negotiations but did not come to a vote, including:

• Reduce debts by 2/3 via a debt for equity exchange.
• Make one-half of VEBA payments in the form of stock.
• Eliminate the jobs bank.
• Work rules that are competitive with transplant auto manufacturers by 12/31/09.
• Wages that are competitive with those of transplant auto manufacturers by 12/31/09.

These terms and conditions would be non-binding in the sense that negotiations can deviate from the quantitative targets above, providing that the firm reports the reasons for these deviations and makes the business case to achieve long-term viability in spite of the deviations.

In addition, the firm will be required to conclude new agreements with its other major stakeholders, including dealers and suppliers, by March 31, 2009.

Note the inclusion of the UAW-busting requirements for competitive wages and work rules, but also note that these are negotiable! This means that when Obama and the more-Democrat congress are seated in 2009, they can soften the blow to the UAW, which I am sure they will try to do.

There is no explicit mention of a "Car Czar", but it would seem that someone would need to be in charge of over-seeing the agreement. It isn't clear if Paulson will be the man, or if another person will be appionted to 0versee the program.

President Bush Speech on TARP Loans

Recorded this morning by your auto blogger for your watching pleasure. See below for transcript.

THE PRESIDENT: Good morning. For years, America's automakers have faced serious challenges -- burdensome costs, a shrinking share of the market, and declining profits. In recent months, the global financial crisis has made these challenges even more severe. Now some U.S. auto executives say that their companies are nearing collapse -- and that the only way they can buy time to restructure is with help from the federal government. This is a difficult situation that involves fundamental questions about the proper role of government. On the one hand, government has a responsibility not to undermine the private enterprise system. On the other hand, government has a responsibility to safeguard the broader health and stability of our economy.

Addressing the challenges in the auto industry requires us to balance these two responsibilities. If we were to allow the free market to take its course now, it would almost certainly lead to disorderly bankruptcy and liquidation for the automakers. Under ordinary economic circumstances, I would say this is the price that failed companies must pay -- and I would not favor intervening to prevent the automakers from going out of business.

But these are not ordinary circumstances. In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action. The question is how we can best give it a chance to succeed. Some argue the wisest path is to allow the auto companies to reorganize through Chapter 11 provisions of our bankruptcy laws -- and provide federal loans to keep them operating while they try to restructure under the supervision of a bankruptcy court. But given the current state of the auto industry and the economy, Chapter 11 is unlikely to work for American automakers at this time.

American consumers understand why: If you hear that a car company is suddenly going into bankruptcy, you worry that parts and servicing will not be available, and you question the value of your warranty. And with consumers hesitant to buy new cars from struggling automakers, it would be more difficult for auto companies to recover.

Additionally, the financial crisis brought the auto companies to the brink of bankruptcy much faster than they could have anticipated -- and they have not made the legal and financial preparations necessary to carry out an orderly bankruptcy proceeding that could lead to a successful restructuring.

The convergence of these factors means there's too great a risk that bankruptcy now would lead to a disorderly liquidation of American auto companies. My economic advisors believe that such a collapse would deal an unacceptably painful blow to hardworking Americans far beyond the auto industry. It would worsen a weak job market and exacerbate the financial crisis. It could send our suffering economy into a deeper and longer recession. And it would leave the next President to confront the demise of a major American industry in his first days of office.

A more responsible option is to give the auto companies an incentive to restructure outside of bankruptcy -- and a brief window in which to do it. And that is why my administration worked with Congress on a bill to provide automakers with loans to stave off bankruptcy while they develop plans for viability. This legislation earned bipartisan support from majorities in both houses of Congress.

Unfortunately, despite extensive debate and agreement that we should prevent disorderly bankruptcies in the American auto industry, Congress was unable to get a bill to my desk before adjourning this year.

This means the only way to avoid a collapse of the U.S. auto industry is for the executive branch to step in. The American people want the auto companies to succeed, and so do I. So today, I'm announcing that the federal government will grant loans to auto companies under conditions similar to those Congress considered last week.

These loans will provide help in two ways. First, they will give automakers three months to put in place plans to restructure into viable companies -- which we believe they are capable of doing. Second, if restructuring cannot be accomplished outside of bankruptcy, the loans will provide time for companies to make the legal and financial preparations necessary for an orderly Chapter 11 process that offers a better prospect of long-term success -- and gives consumers confidence that they can continue to buy American cars.

Because Congress failed to make funds available for these loans, the plan I'm announcing today will be drawn from the financial rescue package Congress approved earlier this fall. The terms of the loans will require auto companies to demonstrate how they would become viable. They must pay back all their loans to the government, and show that their firms can earn a profit and achieve a positive net worth. This restructuring will require meaningful concessions from all involved in the auto industry -- management, labor unions, creditors, bondholders, dealers, and suppliers.

In particular, automakers must meet conditions that experts agree are necessary for long-term viability -- including putting their retirement plans on a sustainable footing, persuading bondholders to convert their debt into capital the companies need to address immediate financial shortfalls, and making their compensation competitive with foreign automakers who have major operations in the United States. If a company fails to come up with a viable plan by March 31st, it will be required to repay its federal loans.

The automakers and unions must understand what is at stake, and make hard decisions necessary to reform, These conditions send a clear message to everyone involved in the future of American automakers: The time to make the hard decisions to become viable is now -- or the only option will be bankruptcy.

The actions I'm announcing today represent a step that we wish were not necessary. But given the situation, it is the most effective and responsible way to address this challenge facing our nation. By giving the auto companies a chance to restructure, we will shield the American people from a harsh economic blow at a vulnerable time. And we will give American workers an opportunity to show the world once again they can meet challenges with ingenuity and determination, and bounce back from tough times, and emerge stronger than before.

Thank you.

Bush's Comments At AEI

President Bush gave an interview to the American Enterprise Institute, a conservative think tank, today in which he revealed some of his thoughts about the automotive industry. If you want to read the whole thing (and you should), it is here.

MR. DeMUTH: You'll be surprised that I have several questions about the auto bailout. (Laughter.) Let me put it in the context of this discussion. Isn't the Detroit bailout an example of interest groups thinking they can get a better deal from the executive branch than from the Congress?

THE PRESIDENT: That's an interesting way of putting it. First, let me take a step back--I haven't made up my mind yet, So you're assuming something is going to happen. (Laughter.) This is a difficult time for a free market person. Under ordinary circumstances, failed entities--failing entities should be allowed to fail.

I have concluded these are not ordinary circumstances, for a lot of reasons. Our financial system is interwoven domestically, internationally. And we got to the point where if a major institution were to fail, there is great likelihood that there would be a ripple effect throughout the world, and the average person would be really hurt.

And what makes this issue difficult to explain is--to the average guy is, why should I be using my money because of excesses on Wall Street? And I understand that frustration. I completely understand why people are nervous about it. I was in the Roosevelt Room and Chairman Bernanke and Secretary Paulson, after a month of every weekend where they're calling, saying, we got to do this for AIG, or this for Fannie and Freddie, came in and said, the financial markets are completely frozen and if we don't do something about it, it is conceivable we will see a depression greater than the Great Depression.

So I analyzed that and decided I didn't want to be the President during a depression greater than the Great Depression, or the beginning of a depression greater than the Great Depression. So we moved, and moved hard. The autos obviously are very fragile and I've laid out a couple of principles. One, I am worried about a disorderly bankruptcy and what it would do to the psychology and the markets. They're beginning to thaw, but there's still a lot of uncertainty.
I'm also worried about putting good money after bad--that means whether or not these autos will become viable in the future. And frankly, there's one other consideration, and that is, I feel an obligation to my successor. I've thought about what it would be like for me to become President during this period. I have an--I believe that good policy is not to dump him a major catastrophe in his first day of office. So those are some of the considerations that we're weighing.

What was the question on autos? (Laughter.)

MR. DeMUTH: The President-elect said--

THE PRESIDENT: Oh, you said Congress and the executive branch.

MR. DeMUTH: Yes, yes.

THE PRESIDENT: Well, just remember a majority of Congress voted for a plan that we thought was a good plan. It didn't get the requisite votes in the Senate in order to move it on, but there was a majority vote if you add up the House and the Senate. So the Congress, in one way, expressed its will for a way forward with some--with a plan, or a strategy for viability.

MR. DeMUTH: But there must be some question in your mind whether the two political branches are better at bankruptcy restructuring than a bankruptcy court. I mean, we do have a law.

THE PRESIDENT: Absolutely.

MR. DeMUTH: Do you think when everybody stops--

THE PRESIDENT: I think under normal circumstances, no question the bankruptcy court is the best way to sort through credit and debt and restructuring, no question. These aren't normal circumstances, that's the problem. This is a hard issue for political people, because people never know how bad it could have been. And so the decisions you make are easy for people to say, why did he do that? Why is he wasting our money on this? Or, why is he doing that? Because without a catastrophe, the reasoning doesn't, it just doesn't really make it down to the grassroots.

People look at, "My money being used because Wall Street got excessive." And I make the case that I didn't want to do this. It's the last thing I wanted to do. Nevertheless, I felt compelled to do it, because it would make life worse for you. We lost 533,000 jobs last month. What would another million jobs lost do to the economy? What would that do to the psychology in markets? What would that do--how would that affect the working people? And so as you can tell, we're all in, in this administration. And if need be, we'll be in for more.

So, bottom line, "normally bankrupcy would be best, but now is not normal. I haven't made up my mind yet what to do".

Update:

Bush said basically the same thing this morning, when he announced loans from the TARP for GM and Chrysler.

IIHS Crashes Small Cars

The Insurance Institute for Highway Safety, IIHS, is an insurance industry funded organization which does its own crash tests, in parallel to the NHTSA. IIHS' tests are more severe than NHTSA's, and are much harder for automakers to score well on.

For example, in the latest round of small car crash tests, the Chrysler PT Cruiser fared miserably in the IIHS side impact test, which uses a high barrier to simulate a mid-size SUV or pickup truck hitting a passenger car in the side. However, the PT Cruiser got a 4 star rating for side impact from NHTSA.

Top Gear Reviews Tesla, Breaks It

This is a hilarious segmeent from BBC's Top Gear show, in which Jeremy Clarkson evaluates a Tesla roadster, and breaks 2 of them. The first one overheats its motor, and has to be parked for a while, and the second one has a brake failure. Clarkson also reports that he only got 55 miles range out of the car.



This shows how difficult it really is to be in the car business and build a quality product--there are more ways for cars to break than they have parts. Even starting with an existing platform (Lotus Elise), the Tesla apparently isn't ready for mass market use.

2Wire Gateway Problems

Ugh.

The last few weeks, my 2wire DSL gateway (model 2701) has been behaving very badly. I can run wired all day long, no problem, but if I used 802.11b or 802.11g connections, the gateway actually drops the DSL link at random intervals. Sometimes it will run a few minutes, sometimes it will only run a few seconds.

I have googled until my eyes are dry looking for solutions, but so far, nothing concrete. Lots of people report the same sort of problem, and the only answer I can seem to find is "use a different router".

Anyone out there have the same issue?

If I find something, I'll post it here.

Update


I have determined that the problem is with the 2wire gateway. If I use a Linksys router and turn off the wi-fi on the 2701, I have no problems, and no dropped access. My 2wire box must have an issue with running 802.11b/g and DSL.

I spoke to AT&T (India) which forwarded me to 2Wire (Phillipines). 2Wire indicated that they could not find anything wrong with my gateway. I asked them if they could arrange a replacement, and they said they normally would--but since I bought my unit second hand, the warranty does not transfer.

My solution is to use the DSL modem part of the box only, and use a separate Linksys wireless router for the wi-fi. So far so good.

So be warned, 2wire won't honor their warranties unless it is original installed equipment!

Call The White House

It is not surprising that when presented with a length of rope by the Senate Republicans, the UAW chose not to hang itself.

There isn't much else we can do. I urge everyone to cares about the U.S. auto industry, its suppliers, and the broad economy in general to contact President Bush right away and ask him to save GM and Chrysler, at least until Obama can get into office and take up the task.

Ronald Reagan saved Harley Davidson. I hope Bush isn't remembered as the president that killed GM.

White House telephone: 202-456-1414
White House email: president@whitehouse.gov

A Little Machiavelli?

The situation with the Republicans being ready to trash the domestic auto industry reminded me of something I read when I was in college and a lot smarter than I am now.

From The Prince, Chapter 8 (Project Gutenberg):

Hence it is to be remarked that, in seizing a state, the usurper ought
to examine closely into all those injuries which it is necessary for him
to inflict, and to do them all at one stroke so as not to have to repeat
them daily; and thus by not unsettling men he will be able to reassure
them, and win them to himself by benefits. He who does otherwise, either
from timidity or evil advice, is always compelled to keep the knife
in his hand; neither can he rely on his subjects, nor can they attach
themselves to him, owing to their continued and repeated wrongs. For
injuries ought to be done all at one time, so that, being tasted less,
they offend less; benefits ought to be given little by little, so that
the flavour of them may last longer.

Or, restated somewhat, if you must do something ugly to the people, do it quickly all at once, get it over with, so that you can start rebuilding your reputation over time by doing beneficial things gradually.

So if you are a Republican and you just lost a big election, now is the time to do damage and break things you want broken, because you have a few years before your next chance at power.

Maybe Dead...

Senator Shelby (R-AL) and 4 others have threatened to filibuster the bridge loan bill. There are 49 Republican senators, and 51 Democrat/Independents. But of the 51, 3 are off duty: Biden, Clinton, and Obama. It isn't clear if the Democrats have enough support to get cloture, so there is a good chance that the Southern Republicans will get their wish--Chapter 11 for GM and Chrysler.

Here's the video: CNBC

The Southern Republicans are determined to bust the UAW. Here is the outline of their plan. An excerpt (red text is my emphasis):

What We Should Be Doing: The American Automotive Reorganization and Recovery Plan

Hard Benchmarks:

On December 2, the Big Three presented to Congress their plans for restructuring. While the plans included laudable goals, too few details were provided ...

The Big Three must lock in the restructuring they have promised in a matter of weeks, not months or years. Congress should instead establish firm benchmarks and a tight timeline for restructuring. Such benchmarks will include for example requiring that by March 31, 2009 each company should reach agreement whereby:

•The companies’ creditors agree to a framework to reduce each company’s indebtedness by at least 1/3.

•The UAW holds to concessions already made and further:
o Concedes the elimination of Supplemental Unemployment Benefits;
o Concedes elimination of the Jobs Bank Program;
o Agrees to either reduce company retiree health care obligations or otherwise convert a portion of such obligations into equity; and
o Agrees to reduce wages and benefits to the levels paid by non-Big Three manufacturers.

A Process for Reaching Expedited Agreement, Instead of Nationalizing America’s Auto Companies

Because of the many legal and contractual hurdles to restructuring, the companies are urged to accomplish their restructuring through the use of a pre-packaged bankruptcy or another mechanism to bring all stakeholders to the table for an agreed-upon determination of their future. It is important that these stakeholders reach reasonable compromises amongst themselves. Creating a government bureaucracy or a “car czar” to arbitrarily pass judgment on the thousands of details involved with a restructuring is akin to nationalizing the auto companies.

Interim Financing: Insurance, Rather than a Taxpayer-Funded Bailout

The Big Three may need some form of interim financing as they finalize their restructuring. In normal economic times, if their restructuring plan is considered viable, such financing should be available in the private market. Because of the current credit crisis, limited assistance may be appropriate in the form of insurance, rather than a taxpayer-funded government bailout that replaces private investment. We propose that the government provide insurance, funded by the participants with a modest FDIC-like fee, which would cover up to 50 percent of the losses of new investment in the case of default, helping to unlock immediate private investment (not unlike debtor in possession financing). Such insurance would expire on March 31, 2009. This proposal ensures that taxpayers are protected and provides a powerful incentive for the Big Three to quickly implement their restructuring plans.

So they are basically saying, 1) break the UAW, and 2) soak the creditors, while offering a 50% insurance policy against default to try to attract private investment.

It's the "private investment" part that worries me.

Not. Dead. Yet.

Thousands of people in the metro Detroit area are breathing a cautious sigh of relief this weekend, after news broke that Congress and the Bush Administration are negotiating a compromise measure to give a loan to GM and Chrysler to keep operating until the Obama administration is seated.

The whole mass has been a fascinating, and depressing political show. I listened to a few hours of the hearings over the last few days, and pompous arrogance of some of the members of Congress was infuriating. Even the sympathetic members, such as Chris Dodd (D-CT) offered ridiculous and unhelpful advice, such as suggesting with a straight face that maybe the Detroit 3 could retool their plants to build mass transit products such as busses and rail cars. "The truck and SUV plants you are closing... these have pretty long wheel bases, don't they?" said Dodd, who apparently acquired a manufacturing engineering degree somewhere, secretly.

Then came the spectacle of Maxine Waters (D-CA) complaining that dealers, specifically small dealers, specifically, minority dealers, were being hurt by all the cuts, and inquiring what the Detroit 3 were planning to do to protect the dealers. This at a time when many commentators, and many other members of Congress correctly realize that having too many dealers their hurts profitability, and reduces the efficiency of the service and distribution divisions.

But the most delicious part of the political battle, for me, was the brawl between Bush and the Democrats on where to take the loan money from. Bush said from the beginning that the financial bailout money ($350 Billion now, $350 Billion later, maybe) was for protecting the financial system, and that Congress should rewrite the Advanced Technology Manufacturer Vehicle Assistance Program (aka "section 136") law to allow that money to be used for bridge loans. The Democrats wanted Bush to use money from the financial bailout money, and to save the ATVM loan program for fuel economy retooling.

Bush stuck to his guns (he is very good at it) and forced the Democrats to make a painful choice: do nothing, and throw the UAW under the bus, or cave, and anger the Greenies. From the Detroit Free Press:

A breakthrough on the long-stalled rescue came when House Speaker Nancy Pelosi yielded to President George W. Bush on a key point: allowing the aid to be drawn from a fund set aside for the production of environmentally friendlier cars.

And, at the 11th hour, the Democrats wisely decided it was the Greens who should be thrown under the bus.

May it always be so.

The Mighty Lincoln Towncar!

I was reading Autoblog's nice summary (here) of the November sales results, and I noticed that Lincoln did surprisingly well compared to the other luxury brands. Lincoln's sales declined only 8%. By comparison, Lexus lost 35%. The only brand to have a smaller decline was Subaru.

So I went and looked at Ford's sales number details for Lincoln, on Ford's media web site.

(Click for full size image)

Lincoln did well because of two models: MKS and, of all things, Towncar. MKS came out of the gate strong, becoming Linoln's best selling vehicle, better even than the cheaper MKZ. And somehow, Ford managed to sell 200% more Towncars than a year ago. In fact, if Towncar had sold the same as last year, Lincoln's sales numbers would be down 20% instead of 8%!

Towncar had better year-over-year results than Subaru Forester (+63%) or BMW's Mini (+43%). I didn't take the time to dig through the other car maker's sales numbers, but I am willing to bet that no single model had a better year-over-year result than Towncar.

I wonder what Ford did to sell them like that... BOGO?

The Demise of Pontiac and Saturn

Update: I have a more recent post on this subject here.

The pundits were predicting that GM would have no choice but to plan to cut brands, and so it wasn't a surprise that they announced, effectively, the end of Pontiac and Saturn. We don't know what a "niche brand" Pontiac will look like, but it might be limited to roadsters and Australian transplants.

Saturn is probably just dead, because there isn't much there to sell. When Saturns were assembled at their own plant, it may have worked, but now that they are variants of other GM models, built in shared plants with shared parts, it doesn't seem like there is much to sell. "Strategic options" seems to me like it means that Saturn will be put down like Oldsmobile.

I wrote 3 years ago that GM should kill Pontiac and keep Buick, you can read the earlier post here. And GM did some things to improve Pontiac, by bringing out the audacious Solstice, and the G8, and the upcoming Sport Truck. But they also shot themselves in the foot with such decidedly unexciting vehicles as the G3, G5, and Torrent. The G6 is a handsome car that just needs some sportier tuning, in my opinion. The Vibe has the same problem--it is a decent car, very practical, but not very exciting to drive.

Saturn is unfortunate, because GM worked very hard to give them a sharp, well defined character and fresh products. The Aura won NA Car of the Year with its sharp looks and much improved interior. The Astra, a Euro transplant, is also a sharp car with good handling. But somehow, the brand just couldn't take off.

I hope GM recycle's the Saturn dealer network, because they are what gave Saturn half a chance to begin with. I shopped for one once, and I liked how I was treated.

A Black Black Friday

This is a tragic Black Friday. Maybe the whole "black friday" thing should be re-thought.

In New York, a Walmart employee was crushed to death by a crowd that broke down the doors to the store.

And, in an unrelated but equally tragic incident, the hostages that were being held at the Mumbai Chabad House were murdered, along with scores of other innocents. This really hits hard in the Jewish community. Chabad is a charismatic sect of Hassidic Judaism that has as its mission to reach out to Jews all over the world. They set up "Chabad Houses" in cities all over the world, so that Jews that are traveling away from home can find a place to have a kosher meal, study, pray, or just rest. All are welcome, irregardless of affiliation or level of religious observance or knowledge. Killing a Chabad Rabbi and his wife is utterly barbaric, because they are the epitome of kindness and hospitality.

An American art professor and his 13 year old daughter were also killed in one of the hotel attacks. Alan and Naomi Scherr were eating a late dinner together at the Oberoi hotel.

Somehow, the death of innocent people reall puts a damper on my commercial spirit. I don't feel much like shopping at this point, do you?

Happy Thanksgiving!

To my readers, I wish you a happy Thanksgiving!

I think Thanksgiving is my favorite American holiday of all, because it is just the right mix of spirituality and patriotism, with awesome comfort food thrown in for good measure. Thanksgiving is a day to take a pause and think about the stuff that really matters, and to be grateful to our Creator for what He has given us. It doesn't matter if you believe in Hashem, the Trinity, or Allah; even if you don't believe in a Creator, and don't like roast turkey, hey, you're still welcome at the table. That's what makes America great, and why we should be thankful for her.

Dark days are looming for Detroit. There are going to be layoffs, plant closings, dislocations, bankrupcies, and foreclosures, at a horrible pace. But we have a lot to be thankful for, nonetheless. And we will pull through, eventually.

This is a generous land, full of generous people, blessed with natural wealth, and a tradition of law and liberty. I thank God for it.

Bailout Debate, Part 2a: More On Corporate Jets

A few data points to consider:

According to the Center for Responsive Politics (http://www.opensecrets.org), in the last several years, Rep. Gary "tin cups" Ackerman (D-NY) has accepted $31,131 in lobbyist funded travel.

Since 2006, Nancy Pelosi has accepted $29,361 in lobbyist funded travel.

From 2005-2006 Harry Reid has accepted $43,879 in lobbyist funded travel.

Nancy Pelosi was given a Boeing 757 so she could fly herself and her retinue from San Francisco to Washington D.C. non-stop, "for security reasons".


Will Speaker Pelosi downsize her plane so she will appear more modest to the taxpayer, who is directly funding her travels? Maybe she could fly commercial?

The New Mazda 3: Happy Happy Happy

I have always been a fan of the Mazda3, which is a spunky little car that doesn't make you feel like you are an underachiever for driving a compact car.

But when I saw the face of the new design, blech.

From this angle, it looks good:

Image courtesy of Edmunds

But from this angle:

Image courtesy of Autoblog

It just looks so damn happy. To me, "zoom zoom" should have a touch of mean, not a huge toothless smile flying down the road. In a way, it reminds of me some Japanese anime critter. Just make the side mirrors into big flowing ears.

For contrast, here is the old one, not quite as happy:

Image courtesy of Edmunds

Bailout Debate, Part 4: Alternatives

Cheap loans are not the only way to aid the domestic auto industry, there are some other policies that might be a big help in the longer term, and insure the success of the short term loans. Here are a few:

1) Encourage demand. Congress could offer tax credits for people who buy a new vehicle (it could be only for fuel efficient vehicles, to pacify the Democrats). Congress could make interest on new vehicle loans tax deductible.

2) Limit supply. If we placed import tariffs on certain foreign manufacturers who are determined to be unfairly supported by their governments, or whose governments don't allow free entry to U.S. made cars (Hyundai/Kia, for example), we could help domestic car sales. Or, perhaps, import tariffs on car makers who do not meet CAFE standards (BMW). Ronald Reagan is credited with saving Harley Davidson by slapping a 45% import tax on foreign made motorcycles.

3) Buy vehicles directly. The federal government could go on a buying spree, and replace most of its fleet of official vehicles with new ones. It could also give grants to the states to do the same. Consider all of the cars and trucks that the military, police, and other agencies must have.

4) Ensure availability of car loans. The government could take steps to require banks who have accepted TARP funds, and who are in the car loan business, to write car loans to people who have jobs and reasonable credit scores.

Bailout Debate, Part 3: Motivations

I think that some of the motivations behind the mostly Republican anti-bailout and mostly Democrat pro-bailout positions are not the ones commonly being discussed.

The Democrats want to loan the Detroit 3 in part because they owe the UAW big for the recent election victories. If the Detroit 3 slide into Chapter 11, the UAW will be hurt very badly, as an oganization. The Democrats, and Obama in particular, have a goal of making unions stronger (card check). Says Newt Gingrich:

To reward the unions that helped produce its electoral victory, the newly empowered Democratic Congress is proposing that American taxpayers pony up $25 billion to bail out the Detroit Three automakers, Ford, GM and Chrysler.

The House Democrats have written loan legislatio which has strings attached (you can read it here), which require the Detroit 3 to make "greener" cars:

‘‘(1) achievement of the fuel efficiency require10
ments and commencement of domestic advanced
technology vehicle manufacturing as authorized in
the Energy Independence and Security Act of 2007;

The House legislation also bans excessive executive compensation and "golden parachutes", which is more populist pandering and soak-the-rich, as usual.

The Republicans don't want to loan the money outright, but instead keep demanding that the Democrats re-write the already passed (and previously commented on by me) Advanced Technology Vehicle Manfacturers Assistance Plan to remove the environmental requirements, and spend the money as aid right away. This is because they want to jam the environmental lobby, I suspect.

The Democrats want the original $25 Billion ATVMAP left in place, and another $25 Billion carved out of the TARP funds. So, sort of unmentioned in all of this, is that the Democrats are really advocating for $50 Billion in low-cost loans--$25 Billion now, and $25 Billion later.

Some Republicans and conservative commentators are saying that Chapter 11 protection is a smarter choice for the Detroit 3, so they can shed their legacy obligations. What this really means is, "let's stick it to the UAW".

Bailout Debate, Part 2: Corporate Jets, SO WHAT?

Several of the Representatives brought up the fact that, gasp, CEOs of big companies fly in corporate jets.

Rep Ackerman (D-NY):

"There's a delicious irony in seeing private luxury jets flying into D.C. and people coming off of them with tin cups in their hand. It's almost like seeing guys show up in the soup kitchen in high hat and tuxedo...Couldn’t you all have downgraded to first-class or at least jet-pooled together?"

Look, these guys are payed like $5000/hr. I can see how it would be silly to have them waste time going through security pat-downs at Detroit Metro. You want them kept busy.

How many of the congressmen have accepted free rides in the "private jets" of lobbyists? How many have used taxypayer funded military transport?

And what about this private jet here, the Obama express?


Hitting the CEOs for flying corporate planes is nothing more than grandstanding and class warfare.

That being said, apparently the CEOs don't have anyone with half a brain working for them in PR--surely, some in the business could have predicted that the press and Congress would jump on them if they showed their high status.

Bailout Debate, Part 1: GOP is CRAZY

There is so much I'd like to write about the Washington debate over making an emergency loan to the Detroit 3 that I don't have remotely enough time to do so. But I'll throw up a few thoughts over the next day or so.

Part 1: The GOP is CRAZY*.

The Republican party just got kicked to the curb by the American voting public. Not only did Obama win, resoundingly, but the Republican party managed to lose seats in the House and Senate, and is in danger of not even being able to filibuster effectively, because of a very slim 1 or 2 seat bulwark.

The GOP lost partly by losing the closely contested states of Ohio and Indiana. Which happen to be big automotive states.

It is nearly impossible for the GOP to put together a winning electoral map without Ohio.

Forget economics. Even of the Republicans are right (I don't think they are) that Chapter 11 protection is the best road , if the Democrats manage to stick in the voting public's memory that Bush and the Republicans fiddled while GM burned, the future gets dimmer in the midwest for the Republican party.

And if the doomsayers are even half correct, and a collapsing GM takes down suppliers, and other companies with it, if the Midwestern unemployment and home foreclosure rates skyrocket--the Republicans are dead.

DEAD.

Because people will remember who was in power when it started, and they will remember who sat there during the committee hearings and shook their fingers at the CEOs and lectured them that Chapter 11 was the best for everyone. And if people start to forget, the Democrats will gleefully remind them.

If the Republicans want to have a chance at regaining power any time soon, they had better come to the table with better ideas for the Detroit 3 than "let them fail, then we'll sort it out".

*I write this as a registered Republican, and former campaign volunteer (2004).

The Walmart Paradox

I went to my local Walmart today, to grab some assorted stuff. The place was packed, on a Sunday afternoon, with people of all backgrounds.

Interestingly, I saw a few cars with Obama stickers in the parking lot, and this made me wonder. Isn't this ironic? The left in general, including Obama, have long been pounding Walmart for their resistance to labor unions. Walmart has been accused of squeezing suppliers, being stingy with health insurance for its employees, and many other sins. So why are Obama people shopping at Walmart?

Could it be the low prices?

And what will happen those low prices, if Obama and the majority Democrat congress have their way, and make it easier for unions to organize by eliminating secret ballots and instituting card check elections? Aren't Obama's supporters trying to undermine the very thing they are using to save money?

And have you noticed, how some liberals, would-be defenders of the "working people" love to hammer Walmart as being a "white trash" magnet. But isn't it the "working people" who shop at Walmart, to stretch their paychecks further? And the very phrase "white trash" is inherently racist, because of the implied contrast to non-white trash.

Kroger, which is unionized, does not have elderly or disabled folks employed as greeters and return checkers, while my local Walmart does. Kroger's employees have gone on strike, causing inconvenience to their customers.

I am unrepentant Walmart shopper. I don't care if I am seen as downwardly mobile by my high-brow neighbors. I often shop at Target, the darling of the bargain hunting style conscious types, but I will not avoid Walmart if they have something I need.

Where else can you go to buy a wireless G router, and also score a good deal on pickles, pumpkin pie components, 9mm ammunition, toothpaste, and motor oil?

Video: Nasty Rollover

Video of a police chase from a Fox news chopper. Guy is fleeing in a white Suburban, goes off the road, rolls it over, and is ejected. There is a moment when it looks like the truck is going to roll over onto the guy, but it stops at the last moment.


Car Chase Ends in Rollover Destruction - Watch more Auto Videos

A Quick Tour Of The $25 Billion ATVMAP

Last night, the Dept. of Energy released a preliminary rule which gives the details of the $25 billion government program offered to automakers to help meet the new CAFE standards. The official name is "Advanced Technology Vehicle Manufacturer Assistance Program". I spent some time reading the paper over, and thought I'd share some details, many of which are not widely reported. The rule paper is located here.

First, the program has two parts: a direct loan program, and a grant program.

The money in either case is intended only to fund plant upgrades or engineering work for a future product, not ongoing operations. In fact, companies are explicitly prohibited from investing the money, and any investment income from the loans must be returned to the government (611.102, 611.105).

Loan Program:

• To qualify for a loan, a company must be working on an Advanced Technology Vehicle. An ATV is defined as a vehicle which has at least EPA Tier II Bin 5 emissions levels, and will have fuel economy that is at least 125% of a "substantially similar" vehicle from 2005. (611.2)

To determine how vehicles are binned for CAFE improvement requirements, DOE binned vehicles into 17 classes, such as Compact Sedan and Compact Performance Sedan. Vehicles are binned by EPA size class and also power/weight ratio (for the "performance" designation".

Here is an excerpt of their examples:
This is the table that shows the fuel economy improvement requirement to be considered an ATV:
So for a Compact Sedan, to qualify as an ATV, the proposed vehicle would have to attain at least 42.2 MPG; a Compact Performance Sedan would have to have fuel economy of at least 29.5 MPG.

• For purposes of calculating the ATV's fuel economy improvement, if it is a flex fuel vehicle, its fuel economy must be calculated without credit for flexible fuel operation. That means that if burns E85, the ATV fuel economy is miles per gallon of E85, not gasoline equivalent. This would appear to penalize flex fuel vehicles compared to how they are treated currently.
• A loan applicant must be "financially viable", such that it does not require the government ATV loan to survive (611.100).
• Automakers and parts suppliers are eligible, as long as the the plant improvements or engineering is done in the U.S. So domestic arms of foreign based companies such as Honda could qualify.
• To qualify for a loan, an automaker's fleet average fuel economy (volume weighted) from the most recent year of data must be no worse than their fleet fuel economy in 2005. (611.100)

This is requirement is to make sure that the loans are only offered to companies who are already moving in the right direction with regards to fuel economy. This is probably a meaningless requirement now, because of the market shift to smaller vehicles, probably all of the automakers CAFE numbers have improved, because CAFE is based on sales volumes.

• Applicants must file environmental impact studies and economic impact studies to document how their plant changes will impact the community, both positive and negatively (611.106).
• Projects will be selected for approval based on technical merit, such as amount of fuel economy improvement, as well as other factors such as "economic diversity", and financial health. Older facilities will be given higher priority.
  
• Applicants must pay any workers that it hires to do the plant renovations a "prevailing wage" in the area the work is being done. This is probably a bone for the unions (611.101).
• A borrower can only borrow up to 80% of a project's projected cost (611.105).
• The loan terms are for 25 years, and the borrower may defer repayment for up to 5 years after the project is complete. The interest rate is to be based on "outstanding marketable obligations of the United States of comparable maturity", which I think means 25 year treasury bonds. (611.107) A 30 year U.S. bond currently pays 4.5%.
• The U.S. government gets a lein on any property which is acquired with loan funds, and any assets which are pledged as collateral for the loans.
  

Grant Program:

• If a grant is requested, the grant can be for no more than 30% of a project's cost. (611.204)
• Grants will be given preferentially for projects that re-tool facilities that are at least 20 years old. (611.206)
• 10% of the money used for grants (not loans) each year is set aside for small companies of 500 employees or less, or a consortium of such small companies (611.207).

Some observations.

This is not a "bail-out". The money can only be used for specific projects which are tied to fuel economy improvements. There are some significant strings attached to this program, and though the loans are cheap, they are expected to be repaid, or the government will be able to sieze the collateral of the borrowing company.

The program seems to be somewhat targeted towards unionized labor. There is a bias in the program to older plants (20 years), and plants which are shut down. There is a prevailing wage rule. There is also a carve-out for small suppliers.

This is not a quick fix. To apply for a grant or loan, a company has to generate a large amount of application paperwork, including environmental impact studies, economic studies, financial status information. A company also has to show with computer modelling or prototypes that their proposed project will improve fuel economy by a very significant 25%, and flexible fuels get no advantage in this calculation. The application and review process is likely to take many months if not years.

That is why, even with this program in place, the Domestic 3 are asking the government for direct aid right away.

The financial strength requirement could be a deal-killer for some or all of the Domestic 3 auto makers. If the DOE uses more stringent requirements for financial health, such as low debt/equity ratios, neither GM, Ford, nor Chrysler may qualify.

Chrysler's Fuel-less Cars!

More google ads silliness from Chrysler, spotted here. The Chrysler EV minivans aren't "Fuel-less", and they aren't for sale, until about 2011 model year.

Veyron in Birmingham MI

I was strolling in downtown Birmingham (MI) today, after cashing in my voting slip for a free Starbucks coffee, when I saw a crowd forming on the sidewalk up ahead. Parked in front of the Einstien Bagel was a Bugatti Veyron. It was black and red. I didn't have a camera with me (of course), and I didn't catch if it was a dealer car or not.


There were about 20 people crowded around the car, ogling and taking cell phone photos. It was as if some guy was hanging out on the sidewalk with a cocktail dress clad Angelina Jolie on his arm.

I can't think of a way to draw more attention for ~$2,000,000, other than maybe giving it away as $20 bills on the street corner.

Obama: Reading The Signs

This is a photo I took near my neighborhood the other morning. It sums up my position nicely.

(c) TheAutoProphet. Photo may be freely distributed and used as long as attribution is given.

Chrysler, GM Cross Shopping

Edmunds has a fascinating analysis of how customers who shop for Chrysler products cross-shop other makes. Read the whole thing here. For example, customers who shopped for Chrysler Town & Country minivans also shopped for:

Top Most Cross-Shopped Against the Chrysler Town & Country
1. Honda Odyssey 43%
2. Dodge Grand Caravan 33%
3. Toyota Sienna 33%
4. Nissan Quest 12%
5. Hyundai Entourage 12%
6. Volkswagen Routan* 9%

The conclusions that Edmunds draws from the analysis is that if GM bought Chrysler, they would want to kill off just about everything except for Jeep and the minivans, where they don't have as much presence. In segments where they do compete, such as mid-sized and compact cars, GM is a frequently cross-shopped brand. This means that if GM killed the Sebring, for example, it would expect to gain some of the volume for itself.

Top Most Cross-shopped Models Against Chrysler Sebring
1. Pontiac G6 13%
2. Chevrolet Malibu 12%
3. Honda Accord 11%
4. Nissan Altima 10%
5. Toyota Camry Solara 10%
6. Dodge Avenger 9%

Nissan is one of the least cross-shopped brands with Chrysler. This implies that a Nissan/Chrysler merger would make more sense for Nissan, because they would pick up more products they don't compete directly against. With the caveat that many of these products aren't doing well. But it might be an opening for Nissan to redevelop Chrysler's cars based on Nissan designs, manufacture them cheaply in Chrysler's plants, and play harder against GM and Ford in the competition for the "domestic" car buyer.

Honda GX Stonewall? Hardly.

According to this piece in TheAutoChannel by one Edwin Black, Honda is pulling an Evil GM (see: EV1) and intentionally limiting the number of Civic GX (compressed natural gas) vehicles it produces and sells.

For all the sinister insinuations, Black doesn't really have an explanation for why it would be that Honda might be producing Civic GXs in limited quantities. That's because Honda clammed up and won't talk to the press about it, which is not surprising. All he can come up with is that Honda is pushing its much thirster Pilot SUV. As if a mid-sized SUV would somehow be hurt by sales of a compact sedan?

There are a number of plausible explanations for why Honda, which is certainly interested in polishing its already good environmental credentials, would be cautious with the Civic GX. Here are a few that are obvious to me:

Quality. Honda is obsessive about quality, and they may want to roll their CNG Civic out slowly until they fully understand how it can fail in the harsh environment of real American drivers.

Cost. Honda may not be making money on these, in fact they could easily be losing money on them, perhaps due to supplier issues. Honda may be treating the program as more of a marketing and product research exercise (like the original Insight?) until they understand the market for CNG better.

Dealerships. Since the CNG Civic has a specialized fuel system, different engine software, and perhaps other changes, special tools and training are required to service it. Since Honda doesn't (can't by law) own dealerships, dealers may have to put up significant capital to get CNG certified. Or perhaps Honda foots the bill, in which case Honda pays significant money for each dealer.

Honda isn't going to spread CNG dealers around the country, if there aren't enough fuelling stations, or customers for that matter, for it to make sense. They will pick a few entry markets, like California and New York, and go there.

And since Honda is obligated to service their CNG Civic, they obviously aren't going to want to sell them in places where they don't have a dealer certified for it yet.

The market is shifting rapidly this way and that. At first, pundits thought diesel was the new way--then the price of diesel shot up so that there was not much of an advantage over gasoline. The ethanol pendulum is swinging one way now, but could swing back the other way again if a backlash builds up. Oil is starting to look cheap again.

Honda isn't being sinister, they're eing cautious in an unpredictible and dangerous economy.

Adobe Photoshop Elements 5.0.2 Vista Bug

I'm posting this to help others find the answer to this bug.

Vista is running fine, but Adobe Photoshop Elements 5.0 had me pulling my hair out... after patching it up to v5.0.2 like Adobe says, and importing my catalog from my old computer, like Adobe says... the Organizer application wouldn't run. It showed me a splash screen, then disappeared.

Task Manager told me that it was running, but it wouldn't open a UI.

After much fooling around, un-installing and re-installing PSE, I finally found this article on Adobe's support site.

Apparently, the file monitor service breaks Organizer on some Vista sysems (like mine). To fix it, I simply turned off the service. From Adobe:

Solution

Turn off the Active File Monitor service.

1. Choose Start, type msconfig in the Search box, and then press Enter.
2. On the Services tab, deselect Adobe Active File Monitor V5.
3. Click OK, and then click Restart.

Note: You may not be able to use the Watch Folders function if you turn off the Active File Monitor service.

This fixed my problem, but now the Organizer won't be able to find new photo files that are dropped in disk folders.

WIndows Vista: Not So Bad

I needed to buy a new PC, and I found a pretty good deal on a Dell Optiplex 330 (dual core, 2GB ram, 160GB HDD). I decided to take a risk and get Windows Vista (Business), even though I read all kinds of horror stories about how unstable, slow, annoying, buggy it is.

Here is my experience so far (after using it for a few hours)

Good:

• UI is nice. Lots of eye candy, Aero interface is a bit blingy but effective. Decently organized. Lots of options for different views.
  
• Boot time is OK for me (my old XP machine took about 45 seconds to boot up, the new one takes about 30)
• Ubiquitous search boxes are neat.
• Sidebar is neat.
  
• Lots of built in goodies like scan/fax, system backup.

Bad:

• The User Account Control thing, the box that comes up and asks you "are you sure" for every little thing is annoying. I appreciate the added security, but I am tempted to turn it off.
• If I ran Windows XP on this machine, I bet it would boot in like 20s.
  

I also heard that much of my old software would not work in Vista. Not true, so far all this stuff seems to be working fine:

• WordPerfect Office 12 SP1 (but SP2 won't install!) I may break down and upgrade to the latest WP Office anyway.
• Microsoft Office XP
  
• Adobe Photoshop Elements 5.0 (with patch)
  
• FireFox 3.0
• Mozilla Thunderbird
• Ad-Aware
• Antivir Free Antivirus
• Quicken 2007 (with patch)
  
• Roxio Media Creator 10
• Apple iTunes

Software that won't work:

• Epson Smart Panel (don't care, Vista has nice built-in scanning functions anyway)
• WP 12 SP2 won't install.

Considering how blazing fast the new machine is compared to my old Dell 3000 (P4), and that it cost all of about $500, I'm very pleased.

Video: Motorcycle Wreck On Board

I don't think the guy was seriously hurt, maybe he learned a lesson?


Crazy Motorcycle Crash Caught on Dash Cam - Watch more free videos

More Thoughts on GM-Chrysler Merger

A few more thoughts on the possible merger of GM and Chrysler.

It sounds preposterous because it would add even more brands to GM's already confusing portfolio.  Consider:

• Cadillac - Luxury
  
• Saab - Euro Luxury
  
• Buick - Soft near-luxury
  
• Saturn - Euro basic / near luxury
  
• Pontiac - "Sporty"
  
• Jeep - Rugged go-anywhere SUVs and some rugged looking cars
• Hummer - Rugged go-anywhere SUVs
• Dodge - "Sporty" cars, manly trucks
  
• GMC - manly trucks
  
• Chevrolet - full line of basic transportation from small cars to trucks
  
• Chrysler - full line of basic transportation from small cars to trucks
  

Chop too many brands and you starve your dealer network.  Keep too many and you get a big badge engineered mess, or lose efficiency.  The new religion in the industry is to be lean, simple, agile--picking up more brands is like going back to the 1990's.  

On the radio this morning, I heard an interview with the guy who broke the story in the New York Times, Bill Vlasic.  One theory, mentioned in the paper,  is that GM may be after a cash-out deal, where they get a pile of cash along with Chrysler.  This may make short term sense, but it would leave GM with the albatross of Chrysler's crummy products, legacy costs, UAW contracts.

Another possibility is that, somewhat like a star expanding into a huge red giant as it begins the final stages of its life, GM may be trying to grow into a company so huge it can not be allowed to fail.  The government would have to come with support, or risk an economic supernova (or black hole?).   

Also, it would make strategic sense in the long run for GM to off a major competitor.  By removing capacity from the system, it may ensure more business for GM in the future.

Video: Old Guy Backs Up Onto Cop Car

A 70 year old guy in Illinois is upset that he got a speeding ticket. He intends to speed away, but is in reverse, and winds up backing up onto the hood of the cop's car.


How To Get Jail Time For A Speeding Ticket - Watch more free videos

GM Acquiring Chrysler?

The WSJ reports from unnamed sources "familiar with the matter" that GM was in talks with Cerberus to trade the rest of GM's stake in GMAC with Cerberus for the car (not finance) part of Chrysler.

This seems like a bizarre idea to me. GM would be picking up a big portfolio of non-competitive products (Sebring, Caliber, etc.) and redundant products (Ram). GM would also get lots of deflated real estate, such as the sprawling Auburn Hills headquarters, not to mention the plants, such as Belividere, which make the weak products. GM would also wind up with more UAW workers, and more UAW pension obligations. And GM would wind up with Chrysler's dealer network, compounding the problem of having too many dealers making too little money.

But GM's management would have some business reason to want Chrysler, what would those reasons be? Here's my theory.

1) Minivans. GM got killed in the minivan segment, and this would put them back in the game.
2) Truck dominance. GM could kill off the separate Ram platform and sell a Ram based on the Silverado, taking the truck sales crown from Ford once and for all.
3) Jeep. Even though Jeep has been watered down somewhat by Chrysler's attempt to grow Jeep into small crossovers (Compass), it is still a strong brand.

But all of these strengths are in the light truck and SUV sector, precisely where GM is already too heavy. With the coming tightening of CAFE rules, what business case would there be for GM to acquire more trucks and SUVs?

The idea just doesn't make much sense to me, as the armchair CEO.

Chrysler Hijacks "Volt" Keyword

Heh, I noticed a little bit of web advertising sneakiness on the part of Chrysler. On my own blog, no less. Take a look at the Google Adwords panel in this screen capture.

The New eBay Motors Scam

There's a new scam going around, which is a slightly more sophisticated variation of a fake escrow trick.

Scammers post for sale ads in classified services such as Craigslist or AutoTrader, with a too-good-to-be-true price. Here is one example I found: 2005 Honda Accord.

"Email me for more details : brendapharell@ymail.com .The car is in a perfect cosmetic and engine conditions, and meticulously maintained. No damage, no scratches or dents, no hidden defects, never been into accidents and it is as advertised. Email me for more pictures at : brendapharell@ymail.com . I cannot get in touch with you if you use the "Email this Seller" option because my email address on autotrader is full so please e-mail me directly at: brendapharell@ymail.com"

The car is a real car--in the sense that they borrowed some photos and a VIN from somewhere, so if you run it through CarFax it will check out as a real vehicle.

If you respond, they send you a fake invoice from eBay Motors, along with a fake "Vehicle Purchase Protection" service email.

Here are examples, cick for larger view:


It isn't a perfect fake, but it may be convincing to someone who doesn't know much about eBay. The real eBay Motors does not operate an escrow service, and they explicitly don't allow MoneyGram payments! Also note the fake eBay email address, "ebay@support-center-vpp.net".

The scammers want you to send a non-traceable payment (MoneyGram, Western Union) to a "payment agent", who is probably some idiot who signed up for a "work at home" job "processing internet payments". That guy cashes the payment, and forwards it on to the scammers.

I tried to make contact with the scammer, but he was being very careful--he wouldn't give me a phone number. He stopped respoding to my emails after I pointed out that eBay doesn't allow Moneygram payments, and asked if he could take a PayPal payment instead.

Update: I am starting to see reports of this scam spreading out into Canada and the UK, using other services such as Moneybookers. The rules are the same. If the price is too good to be true (way below market) or the guy wants you to buy a car without being able to look at it, it's not real.

Oilonomics 201

There seems to be this persistent theme in the energy policy and fuel economy debate that we need to be independent of "foreign oil". In his latest column, for example, John McElroy writes about ways to reduce our use of "Pesian Gulf" oil.

This is really an emotional play, to get people worked up about the issue. There is no such thing as "Persian Gulf" oil, in terms of public policy.

Oil is a commodity, which is traded on commodities markets worldwide. Traders buy and sell contracts, and customers who actually want oil arrange delivery via tanker and pipeline.

The "middle eastern oil" label implies that if we could just reduce our consumption by a few million barrels a day, we could bankrupt the Saudis (a worthy goal) while keeping our Canadian and Mexican friends in business. But really, what would happen, is that we would drive down the global price of oil. The Saudis wouldn't starve, but they would make less profit, as would the Canadians, Russians, and Nigerians.

An unintended side effect of reducing our use of oil would be to make it cheaper for the Chinese and Indians to burn more of it--so from a global warming point of view, reducing our oil consumption may not have that big of an impact if the developing world picks up the slack.

Video: Woman Ejected

As if you didn't need another exhibit of how bad it is to not wear your seatbelt. It is very hard to be thrown out of a car if you are buckled in.


Chick Tossed Out Of Flipped Car - Watch more free videos

Video: Dumb Dad

One day, he might Darwin his way out of the gene pool.


Not Father of The Year - Watch more free videos

GM Dropping Orlando MPV

According to various sources (see Autoblog), GM is killing its plan to bring a c-class (compact) 7-seat people mover to the U.S., the Chevrolet Orlando.  

This puzzles me, for several reasons.  The concept is a handsome vehicle, and looks quite practical.  It reminds me of a down-sized Traverse.   I think it is an exciting vehicle that would compete well.

Other carmakers are already selling small people-movers with some success, such as the Kia Rondo, Mazda 5.  More small MPVs are going to be sold in the U.S. in the near future, such as the rumored Ford C-Max (and possibly S-Max) MPVs based on the European Focus.  Honda may bring the Stream here as well.

Maybe, for some reason, the economics didn't work out for GM.  But from my seat, this looks like a mistake.

WSJ On Future Powertrains

Last weekend, the Wall Street Journal ran a supplement  with some generally well written articles about the future of energy, including such things as LED light bulbs (not quite ready yet) and underground coal gassification.  It is very interesting reading, and if you haven't seen it, take half an hour and read it through.

There was a good article by Joseph B.

 White about why the gasoline engine will be with us for the foreseeable future (lots of power for the pound, low cost).  But the Journal also published a table comparing some of the different upcoming greener powertrain options, which had some issues.  

I can't reproduce the whole table here easily (but you can read it here).  I'll just hit on the parts I think they got wrong.  

First, describing Flex Fuel vehicles, WSJ wrote that they have "no price premium" compared to gasoline vehicles.  This is not really true, as ethanol capable fuel systems must be made of different materials to resist the corrosive effects of alcohol.  Also, the engine control system (mostly the software on the PCM) must be more complex to handle ethanol, because it can be present in any concentration from E10 to E85 due to fuel mixing.  This requires substantially more development work by the powertrain engineers, and substantially more testing.  The actual cost per vehicle of a flex-fuel system is somewhere closer to $100-200/car, in large volumes.

Regarding plug-in hybrids, WSJ noted that the "advanced batteries are not yet available".  This is true, in the high volume commercial sense.  However, it was not mentioned that the high capacity batteries required to make plug-in hybrid cars work will be rather expensive, on the order of $3000/car more expensive than the current hybrid batteries. 

WSJ got sloppy with pure-electric cars.  They wrote, "Technology still unproven. Batteries not available."  Except that pure electric cars have been in mass production since about 1900.  And batteries are available--until recently, most electric vehicles used lead-acid batteries.  The article also misidentified the Chevrolet Volt as a pure electric car, which it is not-it is a "series hybrid", which is a car that has electric drive but can use gasoline to power the electric motor through a generator.   What the article was probably trying to get at was that currently, pure electric cars can not compete in range with gasoline cars, but they didn't' say so explicitly.

Finally, regarding clean diesel, WSJ neglected to mention that most implementations require the driver to top off a urea tank to aid in NOX reduction--a definite annoyance, and a minus in my opinion.

Just. Plain. Wrong.

Today, minding my own business, driving up Southfield Road, I came accross a brand new shiny black Lincoln MKS.

With a glued on vinyl roof.

Any dealer caught doing that to a modern car should have their franchise yanked.

Happy Birthday GM!

Today is GM's 100th birthday. For all of its problems, you can not ignore the impact that GM has had on the automotive industry, and the impact that it continues to have today. Even in its current, pruned form, GM is still one of the largest companies in the world. Some stats:

• 266,000 Employees
• 9.37 million 2007 Vehicle Sales
• Operations in 35 countries
• 13 global brands, plus OnStar
• 6,776 U.S. dealers
• Revenue of about $172 Billion

Some GM Innovations:

• Electric headlamps
• Electric starter
• Energy absorbing steering column
• Unibody construction
• Independent front suspension
• Engines that run on unleaded gasoline
• First mass produced automatic transmission
• Production airbags
• Catalytic converter
• Frigidaire, first room air conditioner
• First mechanical blood pump (for open heart surgery)
• First metal highway barriers
• OnStar, first telematics service

And GM has made some very popular and important cars over the years. Corvette. Suburban. Impala. Camaro. Bel Aire.

Here's a toast to GM. Keep fighting, guys, Michigan and the whole industry needs you.

Food Vs. Fuel: Soybeans Spike

I was browsing through a recent copy the WSJ when I came accross an article about soybean prices. On Friday, soybeans jumped by 23% on worries of short supplies.

The writer attributed the increase to to main factors: lower supply due to displacement by corn, and a delayed harvest due to a wet spring and summer.

Agriculture processors such as Archer-Daniels-Midland Co., and Cargill Inc. crush soybeans into soybean oil and soybean meal. Soy oil is used in cooking and has industrial applications such as biodiesel. Soymeal is fed to livestock.

Soybean stocks are at near-record lows this year. That is partly because farmers last season planted more corn instead of soybeans to cash in on high corn prices driven by a booming export market and a growing appetite for corn-based ethanol.

This illustrates the danger of quickly shifting to food based bio-fuels. The high demand for corn caused farmers to plant more corn and less soybeans (and other crops, like barley and wheat). This reduces the supply of those crops, and causes our animal feed and food prices to increase. Beer is getting more expensive!

Instead of propping up corn based ethanol, making big agriculture even richer, and driving our food prices up, Congress should kill the ethanol tariff and allow importation of ethanol and sugar beet feedstock from Brazil. This will allow us to bridge our ethanol needs until the point when non-food sources of ethanol are viable.

Of course the ethanol mandates and price supports are not the only reason that food has gone up in price so dramatically, probably the largest factor is the price of oil, followed by a weakened dollar.

We have ways to reduce the price of oil, but Congress is not yet willing to use them. It's a shame, because downward pressure on oil would result in downward pressure on food prices also.

Carnival Of Cars 09/13/2008

If you haven't been watching his blog in RSS, be sure to add Mark Tapscott's Straightline Blog over at Edmunds. He just posted the latest version of the Carnival of Cars.

I started the Carnival of Cars for "independent" bloggers some time ago, and later Mark Tapscott took it over and has kept it going.

What's a blog "Carnival"? it's a compendium of posts from a few different blogs, sort of the "best of" and a quick way to check up on what different bloggers are doing. By "independent" bloggers, I mean the small guys who write their own thoughts, rather than repackaging press releases like the corporate owned blogs like Autoblog.

Not that there is anything wrong with Autoblog, but their ratio of original content to repackaged press releases is sometimes pretty small. I wonder what happened to Eric Bryant ("The Angry Engineer")? he was a good source of down-on-the-ground original writing.

The neat thing about small bloggers is that most of us don't make money from our blogs, and are doing it for fun, or as a way to vent.